Translation: Original published in Finnish on 8/23/2026 at 4:05 pm EEST.

Modulight's Q2 revenue and earnings declined year-on-year and missed our forecast. The decrease was impacted by the increased share of lower-priced prototype deliveries and delays in some projects. On the positive side, recurring PPT revenue grew by triple digits. We are lowering our revenue and cost estimates for the coming years due to slower-than-expected development. We revise our target price to EUR 1.1 (from EUR 1.2) due to estimate changes and reiterate our Reduce recommendation.

Revenue was burdened by the decrease in prototype prices

Modulight's Q2 revenue was 1.60 MEUR, missing our forecast (1.87 MEUR). This was an 18% decrease from the comparison period (Q2'25: 1.96 MEUR). According to the company, the decrease was primarily due to an increased share of prototypes delivered to major customers at low prices. In addition, some deliveries were postponed. PPT revenue continued its triple-digit growth (H1: +137%) but was still too small to compensate for the weakness in other deliveries. The company itself particularly highlighted the completion of patient enrollment for a Phase 3 trial. This is possibly Aura Biosciences' Phase 3 eye cancer project (planned readout in H2'27). A launch could occur in 2029 if the study results are sufficiently good and the FDA grants marketing authorization.

Money still flowing in the wrong direction

EBIT landed at -1.35 MEUR, declining year-on-year (Q2'25: -1.06 MEUR). This was in line with our forecast of -1.29 MEUR. Operating costs were also in line with our expectations. EBITDA was barely positive (0.04 MEUR), but it gives an overly optimistic picture of the earnings capacity due to the capitalization of expenses (0.83 MEUR). Depreciation (1.38 MEUR) increased from the comparison period, which burdened the operating profit. Cash flow after investments was -0.83 MEUR and net cash was 5.8 MEUR. Cash burn has slowed down from last year, and the outlook for cash adequacy has gradually improved. However, we believe the financial risk remains clearly elevated. We believe the current cash reserves may be sufficient, but this is uncertain. In our estimation, an approximately 1 MEUR higher quarterly revenue with current fixed costs would be sufficient for cash flows to turn positive.

We are lowering our forecasts due to slower-than-expected development

The company reiterated its guidance for the current year, expecting revenue and EBITDA to grow compared to the previous year. Achieving this target requires a clear improvement towards the end of the year, for which visibility is low. We are lowering our revenue forecasts for the coming years by 10–12% due to slower-than-expected development. Our growth forecast for the current year corresponds to achieving the guidance by a narrow margin. Our EBIT estimates for the next few years are clearly down. However, this is largely due to a revision of depreciations, so the impact of forecast changes on cash flow is considerably more moderate than what could be inferred from the operating profit. At the EBITDA level, the changes remain moderate.

The risk/reward ratio remains unsatisfactory due to unprofitability and weak visibility

We reiterate our Reduce recommendation and lower our target price to EUR 1.1 (previously EUR 1.2) in accordance with our estimate changes. Due to the loss-making business, we rely on the EV/S multiple and DCF calculation for valuation. On our updated estimates, EV/S multiples are around 5.9x and 4.5x for 2026-27, which is a rather high level and requires a clear acceleration in growth. The baseline scenario in our DCF calculation gives the stock a value of EUR 1.1. In our view, the risk/reward ratio remains unsatisfactory due to low visibility, continued unprofitability for the time being, and elevated financial risk.