MRNA Moderna 10-Q 2026-09-30 section summaries

Moderna (MRNA) — Q3 and nine months ended September 30, 2026

Consolidated results

Q3 revenue grew 29%, and 9M revenue grew 46%, driven mainly by international COVID vaccine sales and deliveries under government partnerships. The Q3 return to operating and net income contrasted with continued 9M losses. Cost of sales rose sharply year to date, primarily due to the Arbutus/Genevant settlement; excluding settlement effects, 9M cost of sales increased 14% and its ratio to net product sales plus stand-ready manufacturing revenue fell eight percentage points.

Product sales and revenue quality

For 9M, COVID sales were $1.680B versus $1.168B, and RSV sales were $39M versus $4M; U.S. sales were $914M versus $901M, Europe $569M versus $16M, and rest-of-world $236M versus $255M. Product concentration remains high in COVID vaccines. Q3 gross product sales of $2.597B ($1.971B prior year) were reduced by $1.324B of provisions ($998M) to net sales; 9M gross sales were $3.069B ($2.251B), with $1.350B of provisions ($1.079B). Provisions accrued as liabilities reached $600M, from $509M at year-end 2025.

Moderna had five approved products at quarter-end. mFLUSIVA launched in the U.S. in September, but Q3 sales were immaterial given the timing after the flu contracting season and uncertain uptake. EU-approved mCOMBRIAX had not yet been commercialized. Management expects seasonal demand, with vaccine sales weighted toward fall and winter.

Cash flow

Operating cash outflow improved by $88M year over year. The 2026 outflow reflected the net loss, noncash adjustments and a $1.3B net use from changes in assets and liabilities, including higher receivables from sales and collection timing. Investing included $5.1B of marketable-security purchases, partly offset by $3.9B of maturities and sales. Financing was primarily funded by the convertible-note issuance.

Balance sheet, liquidity and capital

Finite-lived intangibles include a $60M carrying-value license asset arising from the Arbutus/Genevant settlement. The company issued $3.0B principal of 0.00% convertible notes due March 2032 and paid $329M for capped calls intended to reduce dilution or cash-settlement exposure. Initial conversion terms imply approximately 14M shares; maximum shares in limited circumstances are approximately 21M. The $600M principal term loan bears a floating rate (approximately 9.23%), matures in 2030, and is subject to a $500M minimum-liquidity covenant, rising to $750M if borrowings exceed $1.0B; Moderna reported compliance. An additional $900M of delayed-draw commitments remained available, subject to conditions.

Drivers, outlook and risks

The $950M Arbutus/Genevant settlement payment resolved litigation relating to Spikevax and mRESVIA and provides that no future royalties are owed under the settlement. Moderna recorded $876M in Q1 cost of sales and capitalized $74M, with $60M of that asset remaining at quarter-end. A related appeal could require an additional payment of up to $1.3B; no accrual was recorded because a loss was not considered probable. Other cost pressures included inventory write-downs of $54M in Q3 and $133M in 9M. Management expects modestly lower 2026 cost of sales excluding settlement effects, supported by manufacturing efficiencies.

Lower clinical-trial and personnel spending reduced R&D, reflecting portfolio reprioritization and scaled-back studies; management expects lower full-year R&D while continuing to invest in oncology and rare disease. The Merck collaboration’s intismeran autogene program spans nine Phase 2/3 trials. In a Phase 3 melanoma interim analysis, the combination with KEYTRUDA reduced risk of recurrence or death by 42% versus KEYTRUDA alone; overall-survival data remain immature.

Moderna reported 9M operating cash outflow and expects continued negative operating cash flows and substantial investment needs, although management believes cash, investments, expected product-sale cash flows and available credit are sufficient for at least 12 months from issuance of the financial statements. A global valuation allowance limits tax benefits from losses. The company also faces ongoing patent litigation; no material contingent legal liabilities were recognized at quarter-end.

Stock-based compensation was $127M in Q3 and $351M in 9M; $722M of unrecognized compensation cost remained, expected to be recognized over a weighted-average 2.6 years. **

Moderna — Q3 and nine months ended September 30, 2026

Consolidated results

Q3 revenue grew 29%, primarily from product sales, while 9M revenue increased 46%. The improvement in Q3 earnings reflects the return to operating profit and net income; for 9M, operating and net losses narrowed modestly despite higher operating expenses overall. Interest income declined as average investment balances and rates fell. Higher interest expense—$18M in Q3 versus zero and $52M for 9M versus $2M—was mainly related to the term loan, convertible notes and finance leases. Income-tax provisions were $9M for Q3 and $33M for 9M, versus $13M and $27M, respectively; a global valuation allowance limits recognition of tax benefits against the expected full-year loss.

Product sales and deductions

COVID vaccine sales were $1.680B for 9M 2026 versus $1.168B; RSV sales were $39M versus $4M. By customer geography, Q3 sales were $771M in the U.S. versus $782M, $314M in Europe versus $16M, and $188M in the rest of the world versus $175M. For 9M, the respective amounts were $914M versus $901M, $569M versus $16M, and $236M versus $255M. International COVID vaccine deliveries under long-term government partnerships drove much of the growth, while U.S. sales were generally steady. Management expects product sales to return to growth in 2026, supported by the full-year impact of those partnerships.

Gross product sales were $2.597B in Q3 versus $1.971B and $3.069B for 9M versus $2.251B. Provisions, mainly chargebacks, discounts and fees, were $1.324B in Q3 versus $998M and $1.350B for 9M versus $1.079B. Deferred product-sales revenue was $218M at September 30, of which $160M is expected to be recognized within one year.

Costs, investment and pipeline

Cost of sales was 24% of net product sales plus stand-ready manufacturing revenue in Q3, versus 21%; for 9M it was 75% versus 34%. The 9M increase included $971M of third-party royalties, of which $890M related to the Arbutus/Genevant litigation settlement and associated intangible-asset amortization. Q3 cost of sales also included $54M of inventory write-downs and $29M of unused-capacity costs; for 9M, those costs were $133M and $54M, respectively. Excluding settlement-related costs, 9M cost of sales rose 14% and its ratio to the relevant revenue base declined eight percentage points. The company expects a modest 2026 cost-of-sales decrease versus 2025, excluding settlement impacts, citing manufacturing productivity and efficiency.

Lower R&D spending reflected reduced clinical-trial, personnel and stock-compensation costs as some late-stage programs wound down; spending reductions were partly offset by oncology and COVID postmarketing work. Management expects R&D to decline in 2026 versus 2025 while prioritizing oncology and rare disease. Q3 SG&A rose mainly due to legal costs, while 9M SG&A declined with lower personnel and commercial/marketing spending; full-year SG&A is expected to remain relatively consistent with 2025.

The FDA approved mFLUSIVA for adults 50 and older in August, with U.S. sales beginning in September; initial sales were immaterial and uptake remains uncertain. Approval for ages 65 and older was accelerated subject to a postmarketing confirmatory trial. Spikevax and mNEXSPIKE received FDA approval for 2026–27 formulas targeting the JN.1-lineage XFG subvariant. A norovirus Phase 3 interim analysis missed early-success criteria, and no additional cohort is planned this season. An Ebola vaccine entered Phase 1 and was recommended to advance to a Phase 2/3 efficacy study in the DRC.

In Phase 3 INTerpath-001 melanoma, intismeran autogene plus Merck’s KEYTRUDA reduced recurrence or death risk by 42% (HR 0.58; 95% CI 0.45–0.75; p<0.001) and distant-metastasis or death risk by 38% (HR 0.62; 95% CI 0.45–0.85; p=0.002) after median follow-up of 24.6 months. Overall survival remains immature, with a favorable trend, and no new safety signals were reported. Benefit was not apparent in the first six months; a prespecified post-six-month sensitivity analysis showed 58% lower recurrence/death risk and 50% lower distant-metastasis/death risk. The Merck collaboration’s INTerpath program includes nine Phase 2/3 trials, three of them Phase 3 NSCLC trials.

Liquidity, cash flows and funding

Investments are primarily government and corporate debt securities stated at fair value. Working capital increased 17%, as accounts receivable rose $1.2B with quarterly sales, partly offset by a $628M decline in cash and current investments used to fund operations.

Operating cash use included $527M of non-cash adjustments, including $351M of stock-based compensation and $190M of depreciation and amortization, and a $1.3B net use from changes in assets and liabilities. Working-capital uses included a $1.2B increase in receivables and a $159M increase in inventory; a $160M increase in deferred revenue from customer advances partly offset them. Operating cash use improved $88M year over year, primarily from accrued-liability and accounts-payable movements, partly offset by a $481M increase in receivables. Investing cash flow reflected $5.1B of marketable-security purchases, $3.9B of maturities and sales, and $146M of capital expenditures. Financing cash flow primarily reflected convertible-note proceeds net of capped-call payments and higher equity-plan issuance proceeds. Deferred revenue from customer advance payments received or billable was $407M at quarter-end.

In September 2026, Moderna issued $3.0B principal amount of 0.00% convertible senior notes due March 2032, receiving approximately $3.0B net proceeds and spending $329M on capped calls intended to reduce dilution or excess conversion cash payments, subject to a cap. Conversion may be settled in cash, shares or both at the company’s election. A separate $1.5B term-loan facility entered in November 2025 had $600M drawn at quarter-end, with another $900M available as delayed-draw commitments subject to conditions. The variable-rate borrowings mature in November 2030; the company was in covenant compliance.

Moderna reported a $2.0B net loss for 9M 2026, following losses of $2.8B in 2025 and $3.6B in 2024. Management believes cash, investments, expected product-sale cash generation and available credit borrowings can fund projected operations and capital expenditures for at least 12 months after issuance of the statements. It cautions that this outlook is uncertain: COVID-vaccine demand has declined amid a more competitive, commercially driven market, continued investment may sustain negative operating cash flows, and actual cash needs could exceed forecasts. Significant planned spending includes R&D and clinical programs, manufacturing and supply partners, postmarketing requirements, and commercial and regulatory capabilities; much of this spending will not be reimbursed by collaborators. Further milestone and royalty payments, facilities, leases and purchase commitments also add to funding needs. No off-balance-sheet arrangements or material changes in critical accounting policies or contractual obligations versus the 2025 Form 10-K were reported.

For the three and nine months ended September 30, 2026, Moderna reported no material changes to its market risks or its management of those risks compared with the disclosures in its 2025 Form 10-K. The section identifies no new market-risk metrics or specific risk developments.

As of September 30, 2026, Moderna’s CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable-assurance level. No changes in internal control over financial reporting during Q3 2026 materially affected, or were reasonably likely to materially affect, those controls.

Management cautioned that controls cannot provide absolute assurance that errors or fraud will be prevented or detected. Their effectiveness may be limited by faulty judgment, mistakes, circumvention, collusion, management override, changing conditions, or deteriorating compliance.

Risk factors

Moderna reported no material changes to the risk factors in its 2025 Form 10-K other than risks concerning its outstanding 0.00% Convertible Senior Notes due 2032.

The notes require cash repayment at maturity and could require cash settlement upon conversion or repurchase after a defined fundamental change, unless Moderna elects to settle conversions solely in shares. Moderna warns that operating cash flow may be insufficient to service debt and fund capital expenditures. Refinancing, asset sales, or additional debt or equity financing may be unavailable or costly, and equity financing could dilute shareholders. Credit-agreement restrictions, future debt terms, legal limits, or regulatory action could also constrain cash settlement. Failure to make required payments could cause defaults under the notes or other debt, potentially leading to acceleration and added repayment pressure.

If the notes’ conditional conversion feature is triggered, holders may convert during specified periods. Cash settlement could reduce liquidity; even without conversions, accounting rules could require some or all of the principal to be classified as a current liability, materially reducing net working capital. Conversion settled partly or wholly in shares could dilute existing shareholders and pressure the share price. Expectations of conversion may also encourage short selling.

Although the notes have no cash coupon, issuance costs are recorded as a debt discount and amortized over the term, increasing reported accounting interest expense. When Moderna is profitable, the if-converted method may reduce diluted EPS. Accounting treatment could change because of new standards or an irrevocable election of a settlement method.

Moderna entered into capped call transactions covering, subject to customary adjustments, the shares initially underlying the notes. These transactions are intended to limit dilution and/or offset cash conversion payments above principal, but their protection is capped. Counterparty hedging and trading could affect Moderna’s share price. The transactions are unsecured: counterparty default, termination, or insolvency could leave Moderna with an unsecured claim and greater-than-expected dilution; exposure generally increases with the share price or its volatility. Corporate transactions or other developments may require adjustments or renegotiation and could impair the capped calls’ effectiveness. A fundamental-change repurchase obligation and a possible increase in the conversion rate could also make a beneficial takeover more costly or less likely.

During the fiscal quarter, no directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading plan or arrangement. The section reported no financial or business developments.