Moderna's Q3 swing to profit rests on international COVID deliveries and a $3.0B notes deal

The quarter in numbers

Moderna reported third-quarter 2026 revenue of $1,313 million, up 29% from $1,016 million a year earlier. Net product sales were $1,273 million against $973 million, while other revenue slipped to $40 million from $43 million. U.S. revenue was $780 million and international revenue $533 million.

The income statement moved from loss to profit. Income from operations was $130 million, against a loss of $(260) million in the third quarter of 2025. Net income was $162 million versus a net loss of $(200) million, a $362 million improvement. Diluted EPS was $0.38, against $(0.51). Basic EPS was $0.40, and diluted weighted average shares were 430 million versus 401 million basic.

The nine-month picture is still negative. Revenue was $1,847 million versus $1,266 million, but the net loss was $(1,963) million versus $(1,996) million. Nine-month cost of sales was $1,366 million, compared with $416 million a year earlier. That is consistent with the company's full-year cost-of-sales outlook, which includes a $0.9 billion non-recurring litigation settlement charge.

What drove revenue

The company said growth was primarily driven by higher COVID vaccine sales in international markets, supported by deliveries under long-term strategic government partnerships. It named partnerships with the United Kingdom, Canada and Australia. In September it also signed a five-year agreement with a local manufacturer in Mexico for COVID-19 vaccines, which it said supports recurring revenue and international expansion.

The release does not break out sales by product, or give pricing and volume effects beyond attributing cost growth to higher product sales volume. The U.S./international split of roughly 59%/41% in the quarter is not the same as the full-year framework, which the company still expects to be about half U.S. and half international. That implies the mix shifts across the year, though the release does not give quarterly detail.

Costs and margins

Cost of sales rose 54% to $318 million, including $65 million of third-party royalties. The company attributed the rise to higher product sales volume and other manufacturing-related costs. Cost of sales therefore grew faster than revenue, although the release does not state a gross margin.

The profit swing came from operating expenses. R&D fell 27% to $583 million, which the company tied to lower clinical development costs after the completion and wind-down of certain late-stage infectious disease studies, plus broader efficiencies. SG&A rose 5% to $282 million. Total operating expenses were $1,183 million versus $1,276 million. Interest income eased to $62 million from $73 million, and other expense, net, was $(21) million. Income taxes were described as not material, with a valuation allowance maintained against most deferred tax assets.

Balance sheet, cash and guidance

Cash, cash equivalents and investments were $8.0 billion at September 30, versus $6.9 billion at June 30. The increase reflected $2.6 billion in net proceeds from convertible notes and related capped calls, partly offset by the $950 million litigation settlement payment and cash used in operations. The company noted that the majority of third-quarter product sales remained uncollected at quarter-end. Accounts receivable stood at $1,367 million, versus $184 million at December 31, 2025, and nine-month operating cash use was $(2,715) million. The convertible notes carry a $3.0 billion principal amount; the balance sheet shows $2,958 million, alongside $591 million of long-term debt.

Guidance moved up. Revenue growth is now expected at 15% to 25%, above the prior outlook of up to 10%. R&D is expected at about $2.7 billion (previously about $2.9 billion), SG&A is unchanged at about $1.0 billion, and capex is about $0.2 billion (previously $0.2 to $0.3 billion). Year-end cash and investments are now expected at $8.1 to $8.3 billion, up from $4.7 to $5.2 billion. The company attributed the increase to improved operational execution and the convertible financing, and said the outlook excludes about $0.9 billion still available under its credit facility.

Pipeline and regulatory catalysts

In August the FDA approved mFLUSIVA, the company's fifth approved product globally, for adults 50 to 64, with accelerated approval for those 65 and older. Approval came after the annual contracting cycle, so Moderna is running a limited U.S. launch for 2026-2027. The flu/COVID combination is approved in Canada (mCOFLU) and the EU (mCOMBRIAX), and is under review in Japan, the UK and Australia. The company is still awaiting FDA guidance on a U.S. refiling.

In oncology, Phase 3 INTerpath-001 data for intismeran plus KEYTRUDA in resected high-risk melanoma showed a 42% reduction in the risk of recurrence or death (HR=0.58) and a 38% reduction in distant metastasis or death (HR=0.62) in the intention-to-treat population. In a pre-specified sensitivity analysis of the period after six months, the recurrence-or-death reduction was 58% (piecewise HR=0.42; 95% CI, 0.30–0.58). Moderna and Merck are working toward regulatory submissions. The norovirus vaccine interim analysis did not meet the criteria for early success, and the company will engage health authorities on next steps. Pivotal propionic acidemia data are expected in 2026, and a pivotal decision for methylmalonic acidemia awaits that result.

What to watch next

The Analyst Day on November 12 is the next opportunity for detail on the portfolio and strategy. On October 28 Moderna and GSK settled all pending U.S. and European disputes through patent cross-licenses in infectious disease, with no payments due. Other items to track are the collection of third-quarter receivables, intismeran submission timing and further readouts, the propionic acidemia data, the FDA's stance on the combination vaccine, and the mRNA-2808 oral presentation at ASH on December 12. Juan Andres took over as Chief Operating Officer on October 5, following the retirement of Chief Technical Operations and Quality Officer Jerh Collins.