DERIVATIVE INSTRUMENTS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE INSTRUMENTS |
The Company enters into hedge transactions with a major financial institution, using derivative instruments, primarily forward contracts and options to purchase and sell foreign currencies, in order to reduce the net currency exposure associated with anticipated expenses (primarily salaries and related expenses that are designated as cash flow hedges).
The Company currently hedges such future exposures for a maximum period of two years. However, the Company may choose not to hedge certain foreign currency exchange exposures for a variety of reasons, including but not limited to immateriality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange rates.
The Company records all derivatives on the consolidated balance sheets at fair value in accordance with ASC No. 820 at Level 2. Cash flow hedges are recorded in other comprehensive income (loss) until the hedged item is recognized in earnings. The Company does not enter into derivative transactions for trading purposes.
The Company had a net unrealized gain (loss) associated with cash flow hedges of $ 2,909 and $(208) recorded in other comprehensive gain (loss) as of the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, and December 31, 2024, the Company had outstanding hedge transactions in the net amount of $ 31,470 and $ 30,354, respectively.
The fair value amounts of outstanding foreign currency contracts in U.S. dollar as of the periods presented were as follows:
Gain or loss on the derivative instruments, which partially offset the foreign currency impact from the underlying exposures, reclassified from other comprehensive profit (loss) to cost of revenues for the six months ended June 30, 2025 and 2024 were $ 96 and $18 respectively. The amount reclassified from other comprehensive profit (loss) to operating expenses for the six months ended June 30, 2025 and 2024 were $ 446 and $ 90, respectively.
The amount reclassified from other comprehensive profit (loss) to Sales and marketing expenses for the six months ended June 30, 2025 and 2024 were $ 122 and $ 24, respectively.
The amount reclassified from other comprehensive profit (loss) to General and administrative expenses for the six months ended June 30, 2025 and 2024 were $ 106 and $ 20, respectively.
The amount reclassified from other comprehensive profit (loss) to Research and development expenses for the six months ended June 30, 2025 and 2024 were $ 218 and $ 46, respectively.
Non-designated hedges:
The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies. These derivatives do not qualify for special hedge accounting treatment. These derivatives are carried at fair value with changes recorded in financial income, net. Changes in the fair value of these derivatives are largely offset by the re-measurement of the underlying assets and liabilities. The derivatives have maturities of up to twelve months. The impact of the non-designated hedge transactions on the net income (loss) for the six months ended June 30, 2025 and 2024, was $1,871 and $(375), respectively.
As of June 30 2025 and 2024, the Company’s outstanding non-hedge transactions were $ 12,112 and $ 12,588, respectively.
The fair value of the outstanding non-designated foreign exchange contracts recorded by the Company on its consolidated balance sheets as of June 30, 2025 and December 31, 2024, as assets and liabilities are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||