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NovoCure Ltd (NVCR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean top-line and profitability beat versus consensus: revenue $155.0M vs $147.0M consensus and EPS loss $0.31 vs $0.46 consensus; adjusted EBITDA improved to $(5.0)M vs $(45.1)M consensus. Management highlighted momentum across GBM and early NSCLC adoption, with 4,268 active patients globally .*
  • Gross margin of 75% declined YoY on HFE array rollout and treating NSCLC patients ahead of broad reimbursement; 2025 gross margin assumption remains “low 70s” despite new tariff headwinds (potential $8–$11M duties) offset by cost reductions on HFE arrays .
  • Guidance cadence maintained: 2025 revenue growth expected low-to-mid-single digits; steady expense discipline with modest G&A increases and NSCLC launch investments (U.S. + Germany case-by-case reimbursement) .
  • Near-term catalysts: CE Mark for Optune Lua in metastatic NSCLC (Germany launch imminent), July NCCN guideline review, and late-breaking PANOVA-3 presentation at ASCO with an investor event, plus ongoing PMA workstreams (METIS, PANOVA-3) .

What Went Well and What Went Wrong

What Went Well

  • NSCLC momentum: 92 prescriptions in Q1, 62 active NSCLC patients by quarter-end, with ~50/50 ICI vs docetaxel use and 93 unique prescribers (60% new to TTFields) showing breadth beyond neuro-oncology .
  • Regional strength and GBM base: Record 4,162 Optune Gio active patients; double-digit active-patient growth in France (+46%), Japan (+17%), Germany (+10%), U.S. (+4%) YoY .
  • Regulatory wins and visibility: CE Mark for Optune Lua in mNSCLC; PANOVA-3 late-breaking oral presentation at ASCO, positioning TTFields with positive Phase 3 data in a high-need indication .

What Went Wrong

  • Margin pressure persisted: Gross margin fell to 75% (vs 76% YoY), impacted by HFE array rollout and treating NSCLC patients prior to broad reimbursement .
  • Tariff uncertainty introduced incremental COGS risk: U.S. tariff pause at 10% could still drive up to $8M duties in 2025, or up to $11M if prior rates resume; management working to mitigate with supply chain optimization .
  • Loss-making profile continues: Net loss of $34.3M and adjusted EBITDA of $(5.0)M, though both improved vs expectations; revenue from NSCLC recognized on cash collections until a billing/collection track record is established .*

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Revenues ($USD Millions)$155.10 $161.27 $154.99
Gross Margin (%)77% 79% 75%
Net Loss ($USD Millions)$(30.57) $(65.92) $(34.32)
Diluted EPS ($USD)$(0.28) $(0.61) $(0.31)
Adjusted EBITDA ($USD Millions)$1.73 $2.56 $(4.99)
Geography Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
U.S.$98.3 $107.2 $93.2
Germany$17.0 $17.4 $18.7
France$15.2 $15.7 $17.9
Japan$8.6 $8.5 $8.7
Other Markets$11.3 $10.4 $11.9
Greater China (Zai Lab)$4.6 $2.0 $4.6
KPIsQ3 2024Q4 2024Q1 2025
Total Active Patients (TTFields)4,113 4,126 4,268
Optune Gio Active PatientsN/A4,077 4,162
Optune Lua Active Patients (NSCLC)N/A20 62
Optune Lua Active Patients (MPM)N/A29 44
Optune Gio Prescriptions (Quarter)1,586 1,520 1,608
Optune Lua Prescriptions (Quarter)N/A52 (NSCLC) 127 total; 92 NSCLC; 35 MPM
Actual vs ConsensusQ3 2024Q4 2024Q1 2025
Revenue Actual ($USD Millions)$155.10 $161.27 $154.99
Revenue Consensus ($USD Millions)*$143.95*$161.30*$147.00*
Beat/MissBeatInlineBeat
EPS Actual ($USD)$(0.28) $(0.61) $(0.31)
EPS Consensus ($USD)*$(0.33)*$(0.34)*$(0.46)*
Beat/MissBeatMissBeat
EBITDA Actual ($USD Millions)$(29.63) $(60.62) $(34.54)
EBITDA Consensus ($USD Millions)*$(44.35)*$(43.24)*$(45.15)*
Beat/MissBeatMissBeat

Values with an asterisk were retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Margin (%)FY 2025Low 70s expected (headwinds: NSCLC/HFE) Low 70s maintained; tariffs offset by HFE cost reductions Maintained
Revenue GrowthFY 2025Low-to-mid single digits (GBM maturity) Low-to-mid single digits reiterated Maintained
Sales & Marketing OpExFY 2025NSCLC sales force expansion in Q4 2024 Incremental marketing/launch prep; U.S. + Germany thoracic forces fully staffed Slightly raised for launch
G&A OpExFY 2025Q4 2024 included $36.1M one-time SBC (NSCLC FDA approval) Modest increases; leverage existing footprint across indications Controlled increase
Tariffs (COGS impact)FY 2025No material short-term margin impact expected Up to $8M (if 10% pause extends) or up to $11M (if prior rates resume) duties New headwind
NSCLC Germany Reimbursement2025N/ACase-by-case appeals, similar to U.S. commercial path New pathway
NSCLC Revenue Recognition2025N/ARecognize cash collections until collection-rate history established Policy clarification

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3, Q4 2024)Current Period (Q1 2025)Trend
NSCLC launch adoptionFDA approval and U.S. launch commenced; first script shortly after approval (Q3) 92 NSCLC prescriptions; 62 active patients; 93 unique prescribers; ~50/50 ICI/docetaxel Strengthening
Reimbursement & revenue recognitionU.S. approval rate improvements; revenue baseline benefited from back claims (Q4) NSCLC recognized on cash collections; early approvals/appeals success noted Building track record
Tariffs/macroNo material short-term margin impact expected (Q4) Potential $8–$11M import duties; mitigation via HFE cost reductions and supply chain optimization Emerging headwind
Product performance/HFE arraysHFE arrays approved and rolling out (Q4) HFE rollout contributing to GM pressure; cost reduction trajectory ahead of plan Transition phase
Regional trendsStrong France; U.S. approvals improved; active patients 4,126 (Q4) Active patients 4,268; France/Japan/Germany growth YoY Broad-based growth
Regulatory/legalOptune Lua FDA approval (Q3); Breakthrough designations (Q4) CE Mark for mNSCLC; PMA modules submitted for METIS; PANOVA-3 PMA discussions ongoing Advancing
R&D executionPANOVA-3 topline positive (Q4) TRIDENT and PANOVA-4 fully enrolled; data expected H1 2026; KEYNOTE D58/LUNAR-2 opening sites On track

Management Commentary

  • “This is a period of meaningful momentum for Novocure… Our lung launch is progressing. Our pipeline is advancing.” — Ashley Cordova, CEO .
  • “2025 is set to be a defining year… becoming a multi-indication oncology company… CE Mark approval for metastatic NSCLC and PANOVA-3 late-breaker at ASCO.” — William Doyle, Executive Chairman .
  • “We recognize NSCLC revenue on cash collections until we build a collection-rate estimate… encouraging initial approvals and positive outcomes from appeals.” — Christoph Brackmann, CFO .
  • “Gross margin assumption for this year has not changed… offset tariff impacts with being ahead on HFE cost reductions.” — Christoph Brackmann, CFO .

Q&A Highlights

  • Prescriber base depth vs breadth: Focus on “right physician, right patient, right time,” building depth in high-decile practices; 60% new prescribers to TTFields; EMR integration achieved rapidly in a large private practice (months vs years in GBM) .
  • Germany NSCLC reimbursement: Case-by-case appeals initially; launch strategy mirrors U.S. commercial pathways; expectation to establish predictable reimbursement over 2025 .
  • Tariffs clarity: 10% pause vs 7% after pause explains $8M vs $11M impact range; gross margin outlook unchanged due to HFE cost-out progress .
  • PANOVA-3 expectations at ASCO: Full dataset and survival curves; prior topline showed ~2 months survival extension; strong academic interest in locally advanced pancreatic cancer where Phase 3 successes are rare .
  • Launch pacing: 92 NSCLC prescriptions in Q1 aligns with plan; prioritizing second/third-line patients for quality therapy duration and reimbursement success .

Estimates Context

  • Q1 2025 beats: Revenue $154.99M vs $147.00M consensus; EPS $(0.31) vs $(0.46) consensus; EBITDA $(34.54)M vs $(45.15)M consensus. Patient growth and early NSCLC adoption drove top-line outperformance; margin was pressured but within the “low 70s” framework for 2025 .*
  • Consensus coverage: Q1 2025 had 7 EPS and 7 revenue estimates; forward quarters show 7–8 estimates, suggesting stable analyst coverage into the NSCLC rollout.*

Values with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

  • Clean beat on Q1 revenue and EPS with improving adjusted EBITDA trajectory; drivers were GBM active-patient growth and early NSCLC traction with encouraging prescriber breadth .*
  • Margin headwinds (HFE arrays, pre-reimbursement NSCLC, tariffs) are manageable within a “low 70s” GM framework given cost-out progress; monitor tariff policy path and COGS mitigation updates .
  • NSCLC commercial ramp appears linear and sustainable with case-by-case reimbursement in U.S. and Germany; revenue recognition conservatism (cash collections) should normalize with track record establishment .
  • Strong liquidity ($929.1M cash/investments) supports retiring November convertible note and funding multi-indication launches and pipeline execution .
  • 2025 top-line guide context unchanged (low-to-mid single digits), but upside optionality exists from NSCLC scaling, CE Mark expansion in Europe, and potential PMA submissions (METIS, PANOVA-3) .
  • Near-term catalysts for narrative/stock: CE Mark-driven Germany launch, July NCCN review for NSCLC, and late-breaking PANOVA-3 at ASCO with investor event—each could accelerate adoption or sentiment .
  • Watch France/Japan momentum and appeals success rates as indicators for durable growth and margin recovery; management expects growth to slow from Q2 seasonal strength but full-year profile intact .