10. Fair Value Adjustments, Net Currency Exchange Differences and Other Financial Income/Expenses
The following table summarizes fair value adjustments and net currency exchange differences, and other financial income and expenses for the years ended December 31, 2025 and 2024.
|
Year ended December 31 |
|
|---|---|---|
(thousands of €) |
2025 |
2024 |
Fair value adjustments and net currency exchange differences: |
|
|
Net unrealized currency exchange gain/loss (-) |
(45,484) |
22,727 |
Net realized currency exchange gain/loss (-) |
474 |
(678) |
Fair value re-measurement of warrants |
– |
4 |
Fair value gain on financial assets held at fair value |
1,175 |
– |
Gain from settlement of hedging instrument |
22,745 |
– |
Fair value gain/loss (-) on current financial investments |
(18,266) |
73,742 |
Total fair value adjustments and net currency exchange differences |
(39,356) |
95,795 |
|
|
|
Other financial income: |
|
|
Interest income |
46,339 |
89,378 |
Discounting effect of non-current R&D incentives receivables |
1,648 |
1,132 |
Discounting effect of other non-current liabilities |
– |
395 |
Other finance income |
64 |
223 |
Total other financial income |
48,051 |
91,128 |
|
|
|
Other financial expenses: |
|
|
Interest expenses |
(1,034) |
(911) |
Discounting effect of other non-current liabilities |
(1,183) |
– |
Other finance charges |
(646) |
(759) |
Total other financial expenses |
(2,863) |
(1,670) |
|
|
|
Total net financial result |
5,832 |
185,253 |
The net currency unrealized exchange loss in 2025 of €45.5 million primarily consisted of an unrealized exchange loss of €44.8 million on cash and cash equivalents and current financial investments at amortized cost held in U.S. dollars, as compared to an unrealized net exchange gain in 2024 of €22.2 million on cash and cash equivalents and current financial investments at amortized cost held in U.S. dollars. We have cash, cash equivalents and current financial investments held in U.S. dollars, which could generate foreign currency exchange gain or loss in our financial results in accordance with the fluctuation of the EUR/U.S. dollar exchange rate as our functional currency is EUR.
The fair value loss on the current financial investments in 2025 reflected the exchange differences on the money market funds, the interest on these money market funds and the positive effect of the re-measurement at fair value of our money market funds on December 31, 2025. These re-measurement gains were mainly the result of the positive returns on the EUR denominated money market funds.
Interest income was related to interests on treasury bills, term deposits and notice accounts. Interest income decreased due to decreasing interest rates and a shift from investments in term deposits generating financial income to investments in money market funds generating fair value changes. Fair value gains and interest income derived from cash, cash equivalents and financial investments excluding any currency exchange results amounted to €103.0 million in 2025 (compared to €140.4 million in 2024).
Interest expenses were mainly related to interests on leases of buildings and cars and to interests related to defined benefit obligations.
Other financial expenses for 2025 (2024: other financial income) comprise the discounting effect of other non-current liabilities as milestones payables related to the acquisition of subsidiaries.