# How Moderna makes money

CXProWealth Business Lens · Moderna (MRNA) · Q2 FY2026

Read from the 10-Q for the period 2026-04-01 to 2026-06-30, filed 2026-07-31 with the SEC (accession 0001682852-26-000150): https://www.sec.gov/Archives/edgar/data/1682852/000168285226000150/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $145.0M (+2.1% on the year)
- Operating income: -$815.0M (operating margin -562.1%)
- Net income: -$782.0M (net margin -539.3%)
- Gross margin: 35.9%
- Free cash flow: -$563.0M (-388.3% of revenue)
- Cash conversion (operating cash flow / net income): 0.67x
- Capital expenditure: 25.5% of revenue

## Where the money goes (Q2 FY2026)

- Stand-ready manufacturing revenue → Total revenue: $31.0M
- Collaboration revenue (Note 5) → Total revenue: $15.0M
- Grant revenue → Total revenue: $2.0M
- Licensing and royalty revenue → Total revenue: $3.0M
- Net product sales → Total revenue: $94.0M
- Total revenue → Total operating expenses: $145.0M
- Total operating expenses → Research and development: $651.0M
- Total operating expenses → Cost of sales: $93.0M
- Total operating expenses → Selling, general and administrative: $216.0M
- Net loss → Total operating expenses: $767.0M
- Interest income → Other (expense) income, net: $19.0M
- Interest income → Total operating expenses: $48.0M
- Net loss → Provision for income taxes: $15.0M

## Where the revenue comes from

### Products and services (CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS)

| Member | Value | Share |
|---|---:|---:|
| Net product sales | $94.0M | 64.8% |
| Other revenue | $51.0M | 35.2% |

The members sum to total revenue.

### Products and services (Other Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Stand-ready manufacturing revenue | $31.0M | 21.4% |
| Collaboration revenue (Note 5) | $15.0M | 10.3% |
| Licensing and royalty revenue | $3.0M | 2.1% |
| Grant revenue | $2.0M | 1.4% |

The members do not sum to total revenue.

### Regions (Net Product Sales - Schedule of Revenue from External Customers by Geographic Areas (Details))

| Member | Value | Share |
|---|---:|---:|
| Europe | $16.0M | 11.0% |
| Rest of world | $8.0M | 5.5% |

The members do not sum to total revenue.

## Income statement, as filed

| Line | Q2 FY2026 | Of revenue |
|---|---:|---:|
| Total revenue | $145.0M | 100% |
|   Net product sales | $94.0M | 64.8% |
|   Other revenue | $51.0M | 35.2% |
| Cost of sales | $93.0M | 64.1% |
| Research and development | $651.0M | 449.0% |
| Selling, general and administrative | $216.0M | 149.0% |
| **Total operating expenses** | $960.0M | 662.1% |
| **Loss from operations** | -$815.0M | 562.1% |
| Interest income | $67.0M | 46.2% |
| Other (expense) income, net | -$19.0M | 13.1% |
| **Loss before income taxes** | -$767.0M | 529.0% |
| Provision for income taxes | $15.0M | 10.3% |
| **Net loss** | -$782.0M | 539.3% |
| Basic (in usd per share) | -$2 | 0.0% |
| Diluted (in usd per share) | -$2 | 0.0% |
| Basic (in shares) | 398,000,000 |  |
| Diluted (in shares) | 398,000,000 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2016 | $108.4M | -$223.8M | -$216.2M | $66.7M | $33.1M | $33.6M |
| FY2017 | $205.8M | -$269.4M | -$255.9M | -$331.5M | $58.4M | -$389.9M |
| FY2018 | $135.1M | -$413.3M | -$384.7M | -$330.9M | $105.8M | -$436.6M |
| FY2019 | $60.0M | -$546.0M | -$514.0M | -$459.0M | $32.0M | -$491.0M |
| FY2020 | $803.0M | -$763.0M | -$747.0M | $2.0B | $68.0M | $2.0B |
| FY2021 | $18.5B | $13.3B | $12.2B | $13.6B | $284.0M | $13.3B |
| FY2022 | $19.3B | $9.4B | $8.4B | $5.0B | $400.0M | $4.6B |
| FY2023 | $6.8B | -$4.2B | -$4.7B | -$3.1B | $707.0M | -$3.8B |
| FY2024 | $3.2B | -$3.9B | -$3.6B | -$3.0B | $1.1B | -$4.1B |
| FY2025 | $1.9B | -$3.1B | -$2.8B | -$1.9B | $192.0M | -$2.1B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: -39.9% (year before -52.7%): accelerating
- Operating income: — (year before —): too short a history to read
- Net income: — (year before —): too short a history to read
- Free cash flow: — (year before —): too short a history to read

## Operating figures stated in the filing

- Development programs in clinical studies: 36 programs (as of 2026-06-30). "We also have a diverse development pipeline of 26 development candidates across our 36 development programs currently in clinical studies." (Item 1. Financial Statements)
- Development candidates: 26 candidates (as of 2026-06-30). "We also have a diverse development pipeline of 26 development candidates across our 36 development programs currently in clinical studies." (Item 1. Financial Statements)
- Intismeran five-year Phase 2b melanoma data: reduction in risk of recurrence or death vs KEYTRUDA alone: 49.0% (as of 2026-06-30). "The data showed a sustained benefit with intismeran in combination with KEYTRUDA, reducing the risk of recurrence or death by 49% compared to KEYTRUDA alone." (Item 1. Financial Statements)
- Moderna Science Center (headquarters) floor area: 462,000 square feet (as of 2026-06-30). "The MSC, comprising approximately 462,000 square feet, includes our principal executive office and additional office and laboratory spaces." (Item 1. Financial Statements)

## Key insights

### Partner and capacity fees offset falling vaccine sales

Other revenue rose to $51M from $28M, 35.2% of revenue, while net product sales fell 17.5%, so fees held the top line up.

Net product sales fell to $94M from $114M, which the filing attributes primarily to lower COVID vaccine sales in the United States and South America, partly offset by deliveries in the United Kingdom. Other revenue rose to $51M from $28M. Stand-ready manufacturing revenue, earned for keeping production capacity available, grew 82.4% to $31M, or 21.4% of revenue. Collaboration revenue grew 275% to $15M, mainly from the Recordati agreement. _(from the filing)_
Together these kept total revenue at $145M, 2.1% above the $142M of a year earlier. A year earlier, product sales were 80.3% of revenue. This quarter they were 64.8%. _(from the filing)_
Analysis: this is the part of the top line not tied to the vaccine season. Stand-ready fees of $31M are small against the $1,016M of revenue in the third quarter of 2025, but in a spring quarter they decide whether revenue grows or shrinks. The Recordati upfront payment is recognized over time, so part of collaboration revenue is one agreement spread across quarters. The filing does not name the stand-ready counterparties, so how concentrated these fees are is not visible. _(analysis)_

### The loss narrowed through cost cuts, not sales

Total operating expenses fell 8.5% to $960M while revenue grew 2.1%, cutting the loss from operations to $815M from $907M.

Every cost line fell. Research and development fell 7.0% to $651M, selling, general and administrative 6.1% to $216M, and cost of sales 21.9% to $93M. Revenue rose only to $145M from $142M, so the improvement in the loss from operations came almost entirely from spending. _(from the filing)_
The filing attributes the research decline mainly to lower clinical trial costs from the wind-down of several late-stage programs, including the flu plus COVID combination, congenital CMV and norovirus programs, and to portfolio reprioritization. Cost of sales was 64.1% of revenue against 83.8% a year earlier, which the filing explains by lower unutilized manufacturing capacity costs. _(from the filing)_
Research still dominates the cost base: $651M is 67.8% of total operating expenses and 449% of revenue. The loss from operations was 562% of revenue. _(from the filing)_
Analysis: cuts that come from finishing or stopping late-stage trials lower the loss without changing what the business earns. The test is whether the programs nearest approval keep their funding while the total keeps falling. _(analysis)_

### Interest on cash earned more than other revenue

Interest income of $67M exceeded the $51M of other revenue and equalled 46.2% of total revenue, but it is shrinking with the cash.

Interest income on the company's cash and investments was $67M this quarter, against other revenue of $51M and net product sales of $94M. It offset 8.2% of the $815M loss from operations. _(from the filing)_
It is falling. Interest income was $81M a year earlier, and the filing attributes the decline to lower average investment balances and interest rates. Other items swung to an expense of $19M from income of $8M, mainly interest on the term loan taken on in November 2025. _(from the filing)_
Analysis: in its seasonal trough the company's cash works as a second income line. Each quarter of losses shrinks the base it earns on, so the cushion thins in two ways at once, less cash and less income from it, while the loan adds an interest cost that did not exist a year earlier. _(analysis)_

### Cash burn ran well below the reported loss

Operating cash outflow of $526M was well below the $782M net loss, and free cash flow improved to negative $563M from negative $922M.

Operating cash flow was negative $526M against a net loss of $782M. Capital spending was $37M, or 25.5% of revenue, leaving free cash flow of negative $563M. A year earlier, operating cash flow was negative $919M and free cash flow negative $922M. _(from the filing)_
For the half year, the filing explains the gap between loss and cash by non-cash charges, chiefly stock-based compensation and depreciation, by customer advance payments recorded as deferred revenue, and by higher accrued liabilities driven by the litigation settlement accrual with Arbutus and Genevant. _(from the filing)_
That settlement is a lump sum payable in the third quarter of 2026. It was charged to costs in the first quarter, when cost of sales of $955M exceeded that quarter's revenue of $389M, but the cash had not left by the end of June. _(from the filing)_
Analysis: the lower second-quarter burn flatters the cash picture. The accrued settlement is due to reach the cash flow statement in the third quarter, which is also when the vaccine season has historically started to bring collections in. _(analysis)_

### Competitive edge

- **One mRNA platform runs 36 clinical programs** The same kind of molecule and process carry across 26 candidates in 36 programs, so one research budget funds many bets in parallel.
- **Partners fund part of the riskiest programs** Merck splits intismeran's costs equally, Recordati licensed a rare disease therapeutic, and Blackstone funds flu development, so others carry part of the risk.
- **Governments pay to keep capacity ready** Stand-ready manufacturing revenue grew 82.4% to $31M, 21.4% of revenue, turning part of seasonal demand into fees for availability rather than doses.

### What to watch

- **Spring revenue was 14.3% of autumn's** Revenue of $145M was 14.3% of the $1,016M earned in the third quarter of 2025, and doses are made before demand is known.
- **Patent disputes already reached the income statement** The Arbutus and Genevant settlement pushed first-quarter cost of sales to $955M, above that quarter's $389M of revenue, and an appeal could add a further payment.
- **A secured loan now sits on a shrinking cushion** The term loan adds interest cost and a minimum cash covenant just as interest income fell to $67M from $81M.

## Investor view

**Moderna spent $651M on research in its off-season quarter, while vaccine sales fell and partner fees grew**

### How it makes money

Moderna sells mRNA vaccines and is developing mRNA medicines in infectious disease, oncology and rare disease. In the second quarter, net product sales of $94M made up 64.8% of total revenue of $145M. The filing lists four approved products: Spikevax and mNEXSPIKE for COVID, mRESVIA for RSV, and the flu plus COVID vaccine mCOMBRIAX, approved in Europe and not yet commercialized at quarter end. _(from the filing)_
The rest is other revenue, $51M. Its largest part is stand-ready manufacturing revenue of $31M, 21.4% of revenue, earned for keeping production capacity available. Collaboration revenue was $15M, licensing and royalty revenue $3M and grant revenue $2M. _(from the filing)_
Demand is seasonal, and the company says so directly: "We anticipate seasonal fluctuations in demand for our COVID and RSV vaccines, with higher sales expected during the fall and winter seasons." The pattern is in the history: revenue was $1,016M in the third quarter of 2025, against $142M in the second quarter of that year. _(from the filing)_
Spending runs far ahead of sales in this part of the year. Research and development was $651M, 449% of revenue, and total operating expenses were $960M, for a loss from operations of $815M. Interest income of $67M on the company's cash and investments offset part of it. _(from the filing)_

### What shifted

The mix moved away from vaccine sales. Net product sales fell 17.5% to $94M from $114M, which the filing puts down "primarily due to lower COVID vaccine sales in the United States and South America, partially offset by product deliveries in the United Kingdom." Europe contributed $16M and the rest of the world $8M. _(from the filing)_
Other revenue rose to $51M from $28M, which held total revenue 2.1% above a year earlier. Stand-ready manufacturing revenue grew 82.4% and collaboration revenue 275%, the latter mainly from the Recordati agreement for the propionic acidemia therapeutic, whose upfront payment is recognized over time. _(from the filing)_
Cost of sales fell 21.9% to $93M, or 64.1% of revenue against 83.8% a year earlier. The filing says the decrease was "primarily due to lower unutilized manufacturing capacity costs." Gross margin was 35.9% this quarter. _(from the filing)_
Costs came down across the board. Research and development fell 7.0% to $651M, which the filing attributes mainly to lower clinical trial costs from "the wind-down of several late-stage programs". Selling, general and administrative fell 6.1% to $216M. Total operating expenses fell 8.5% to $960M, and the loss from operations narrowed to $815M from $907M. _(from the filing)_
Below the operating line, interest income fell to $67M from $81M on "lower average investment balances and interest rates", and other items swung to an expense of $19M from income of $8M, mainly interest on debt taken on in November 2025. Net loss was $782M, or $1.97 a share, against $825M, or $2.13, a year earlier. _(from the filing)_

### Risks in the filing

The quarterly report says its risk factors have not changed materially from the annual report, and its notes show the ones in play. Demand is seasonal and forecast-driven: inventory is written down when it is "in excess of expected demand" or reaches its shelf life, and the COVID vaccines keep for nine to twelve months. _(from the filing)_
Intellectual property is contested on several fronts. The company settled with Arbutus and Genevant, with a lump sum due in the third quarter and an appeal that could require an additional payment. It is suing Pfizer and BioNTech, and faces patent suits from GSK, Northwestern University, Bayer and Monsanto units, mNG Bio, BioNTech, CureVac and Sanofi subsidiaries. _(from the filing)_
Clinical and regulatory outcomes decide future revenue. The norovirus vaccine trial "did not meet statistical criteria for early success" at an interim analysis, the US flu plus COVID filing awaits FDA guidance on refiling, and the flu vaccine was under FDA review at quarter end. The company also faces shareholder litigation over statements about its RSV vaccine. _(from the filing)_
The term loan from lenders led by Ares Capital is secured by a first-priority lien on substantially all of the company's assets, limits further borrowing and asset sales, and requires a minimum cash balance unless the company's market value stays above a set level. _(from the filing)_
Two of these risks already show in the numbers. Seasonality is the whole shape of the quarterly history, with spring revenue a small fraction of autumn's. The patent settlement already sits in costs: it is why first-quarter cost of sales exceeded that quarter's revenue. The other lawsuits and the pending trial readouts have not yet reached the income statement. _(analysis)_

## Founder view: mechanisms

### One platform, many programs

Every Moderna product is the same kind of molecule: mRNA instructions carried in a lipid delivery particle. Changing the target means changing the sequence, while the manufacturing process, the delivery technology and much of the safety knowledge carry over. That lets one research budget run many programs in parallel across vaccines, cancer and rare disease, and lets a new product, like the flu plus COVID combination, build on two earlier ones. _(analysis)_

### Partners carry cost and risk

Moderna shares the cost of its riskiest programs with parties that bring money or reach. Merck splits the cost of the cancer program intismeran. Recordati licensed the propionic acidemia therapeutic and will sell it. Blackstone funds flu vaccine development in return for royalties and milestones if it is approved. CEPI funds vaccines against epidemic threats. Moderna keeps the science and the manufacturing; partners take part of the risk and part of any reward. _(analysis)_

### Paid to keep capacity ready

Some governments pay Moderna not only for doses but to keep production ready inside their borders, under long-term partnerships. That turns part of a seasonal, uncertain demand into fees the company earns whether or not a season is heavy. It is the vaccine version of a capacity reservation. _(analysis)_

### Building ahead of the season

Moderna makes vaccines before it knows how many it will sell, for a season that lasts months, with a product that expires. Spring and summer are spent producing and spending; autumn and winter are when sales arrive. Forecast errors show up as inventory write-downs, and spare capacity costs money even when it stands idle. _(analysis)_

## Member research

Signed-in members read, on the page: what Moderna's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Moderna 10-Q for the period to 2026-06-30: https://www.sec.gov/Archives/edgar/data/1682852/000168285226000150/ (2026-07-31)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02