on the Company 4.A 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. 39 Our headquarter office is located in Israel at 5 David Fikes St., 10th Floor, Rehovot. Our website address is www.novami.com, 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 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. 40 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. 41 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: • 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. • 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. • 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. • 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. 42 • 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. • 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. • 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. • 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. • 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. • 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. 43 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. 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. 44 Technology Product Line Key applications Product families • Broadband Spectrophotometry • Scatterometry • Spectral Reflectometry • Imaging and Image Processing Dimensional Optical CD Integrated Metrology Critical Dimensions Thin films Wafer topography Nova i Platform Dimensional Optical CD Stand-Alone Metrology Nova T-platform Nova MMSR Nova VeloCD • Spectral Interferometry Nova Prism • Spectral Coherence Interferometry • Spectral Reflectometry • White Light Interferometry Film/wafers Thickness Wafer Topography Roughness Critical dimensions Nova SemDex Nova WMC • X-Ray Photoelectron Spectroscopy • X-Ray Fluorescence X-Ray Materials Metrology Thin film Composition Nova VeraFlex • Secondary Ion Mass Spectrometry SIMS Materials Metrology Composition depth-profiling Nova Metrion • Raman Spectroscopy Optical Materials Metrology Strain Crystallinity Composition Strength/Stress Nova Elipson • Titration – various types • CVS, CPVS, PCGA • Spectrophotometry • HPLC • Dynamic Surface Tension • pH, conductivity, density Chemical Process Control – Analysis and Replenishment Electroplating process applications in interconnect, advanced packaging Nova Ancolyzer Nova AncoScene • Solid dosing Metal Replenishment 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 • Advanced Algorithms Nova FIT for Films CD Metrology Nova FIT for Material Metrology • Big Data Analytics • High Power Computing Fleet Management (Software solutions) Nova FM Nova HPC QED 45 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. 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. 46 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. • 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. • 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. • 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. 47 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. • 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: • 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 Our sales and marketing strategy is based mostly on direct sales channels where we engage with our customers from the early stages of process development, to address their challenges in the development phase, and later on support their technology transition to high volume production. We seek to establish and maintain tight cooperative relationships with our customers by consistently providing them with a high level of service, support and new capabilities. We have a global network of sales and marketing, customer service and applications support offices worldwide. Our teams are empowered by frequent trainings, remote support options, online resources and rich marketing collateral. 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. 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 % 48 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. 49 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. 50 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. 51 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. 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. 52 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 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: Name of Subsidiary Place 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 *A wholly owned subsidiary of Nova Measuring Instruments GmbH. 4.D Property, Plant and Equipment Location Purpose of use Approximate SQM Expiration date Israel Rehovot and Ness Ziona Offices, manufacturing and laboratories 18,000 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 Fremont California Offices, manufacturing and laboratories 10,800 August 2034 with an option to extend for an additional five years, subject to customary conditions. Germany Bad Urach Offices, manufacturing and laboratories 6,500 The facility is owned by the Company and as of January 2025, has fully replaced the Pliezhausen facility. Germany Mannheim Offices, manufacturing and laboratories 6,150 The facility is owned by the Company. Taiwan Hsinchu Offices and laboratories 2,000 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. 53