v3.25.2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company enters into foreign currency forward contracts and options strategies (put and call options) with financial institutions to protect itself against the foreign exchange risks, mainly exposure to changes in the exchange rate of the New Israeli Shekel (“NIS”) against the U.S dollar that are associated with forecasted future cash flows for up to twelve months. The Company’s risk management strategy includes the use of derivative financial instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates; these derivative instruments are designated as cash flow hedges. The Company does not enter into derivative transactions for trading or speculative purposes.
As of June 30, 2025 and December 31, 2024, the notional amounts of the Company’s derivative instruments designated as cash flow hedging instruments outstanding in U.S. dollars amounted to $37,841 and $49,502 respectively.
Gross notional amounts do not quantify risk or represent assets or liabilities of the Company but are used in the calculation of settlements under the contracts.
The Company records all cash flow hedging instruments on the consolidated balance sheets at fair value. The fair values of outstanding derivative instruments designated as cash flow hedging instruments were as follows:
June 30,
December 31,
20252024
Unaudited
Prepaid expenses and other current assets$2,788 $468 
Accrued expenses and other current liabilities$(20)$(50)
The gains (losses) related to cash flow hedging instruments, recorded in the consolidated interim statements of loss, for the three and six months ended June 30, 2025 and 2024, were as follows:
Three months ended June 30,Six months ended
June 30,
2025202420252024
Unaudited
Cost of revenues$66 $— $82 $15 
Research and development577 — 725 174 
Sales and marketing150 — 188 43 
General and administrative108 — 135 35 
Total gains recognized in the consolidated statements of loss, net$901 $— $1,130 $267 
            
Effect of Foreign Currency Contracts on Accumulated Other Comprehensive Income (Loss)
Net unrealized gains (losses) of foreign currency contracts designated as cash flow hedging instruments are recorded in accumulated other comprehensive income (loss).
The changes in unrealized gains (losses) on the Company’s derivative instruments recorded in accumulated other comprehensive income (loss) were as follows:
Six months ended
June 30,
20252024
Unaudited
Unrealized gains on derivative instruments at the beginning of the period$418 $948 
Changes in fair value of derivative instruments3,480 (720)
Reclassification of gains recognized in the consolidated interim statements of loss from accumulated other comprehensive income (loss)(1,130)(267)
Unrealized gains (losses) on derivative instruments at the end of the period (unaudited)$2,768 $(39)
All net deferred gains in accumulated other comprehensive income as of June 30, 2025, are expected to be recognized over the next twelve months as operating expenses in the same financial statement line item in the consolidated interim statements of loss to which the derivative relates.