Modulight Q4'24 preview: We don't expect any major surprises

Translation: Original published in Finnish on 02/20/2025 at 07:00 am EET

Modulight will publish its Q4 results on Friday, February 21 at 1:00 pm EET. We expect moderately growing revenue from Phase III clinical projects and ophthalmic lasers. In absolute terms, our revenue expectations are still at a low level. The result is likely to remain well in the red, but due to the calming of investments we expect a clear year-on-year improvement. The outlook for the last year of the strategy period 2023–2025 is of particular interest.

Announced revenue drivers will not  have an impact on Q4

During Q4, Modulight announced that it had signed agreements under the PPT model (pay-per-treatment billing model) cumulatively worth 1.5 MEUR for 2025-26. The company also announced a single order of 0.5 MEUR to be delivered in H2’25-H1’26. These announcements do, therefore, not affect Q4’24 figures. Our Q4 revenue forecast of 1.20 MEUR implies growth from the comparison period (Q4’23: 1.02 MEUR). However, revenue is still low relative to the company's cost structure and history. We expect the Phase III clinical trials announced in H2'23 to continue to generate recurring revenue through ongoing patient enrollment. Revenue is also generated by the ophthalmic laser commercialized in the US starting from 2023, as well as several smaller projects, as is typical.

Our EBIT forecast of -2.01 MEUR represents a significant year-on-year improvement, particularly due to lower investments but also higher revenue. The Q3’24 report also showed signs of cost-cutting, as the number of personnel had decreased below the level of previous quarters. Other operating expenses were also declining. We expect stricter cost control to continue in Q4 and the year that has started. The company's cash position remains strong (Q3'24 net cash 13.5 MEUR), but due to negative cash flows, cash adequacy risks are increasing.

Growth is still expected, but…

Modulight does not provide guidance, but the company's strategic goal for 2023-2025 is strong annual revenue growth and strong profitability at the EBITDA level. During the first half of the strategy period, the targets were not reached, and revenue has been on a downward trend. The loss has decreased as investments have calmed down, but there is currently no visibility on a turnaround. For 2025, we expect revenue of 7.7 MEUR, but our forecasts have been overly optimistic so far. We, therefore, emphasize that visibility into Modulight's business development is very low. Some information is available about the components of revenue based on announcements made in late 2024, but these explain only just over 1 MEUR of this year's revenue, so the overall growth forecast remains largely dependent on other growth drivers. Modulight has also reported projects with significant revenue potential that are close to commercialization. We hope that more information on these growth drivers will be provided in connection with the Financial Statements Bulletin.

Our EBIT forecast for 2025 is -6.3 MEUR, which means an improvement on the comparison period (2024e: -8.1 MEUR). The view is based on growing revenue and the continuation of stricter cost control that began last year.