Profitability improved despite the decline in revenue

“The company’s profitability continued to improve despite a 7 % decline in revenue compared to the corresponding period. Increased customer activity since last summer started to translate into orders, and cooperation with new large customers is advancing faster than before. We initiated several new projects with industry-leading companies that fit our strategy perfectly. Our cost structure has remained solid, and we continue our efforts to improve operational efficiency. The diversification of the customer portfolio, along with project progress and a growing number of projects, supported the company’s overall development.

Our EBITDA margin increased to 22% during the quarter, improving by 157% to EUR 0.3 ( 0.6) million. Correspondingly, operating result improved by 33% to EUR -1.1 (-1.6) million. Our continued focus on product profitability has contributed to improving gross margins, which supported profitability despite lower revenue.

Our product platform is now suitable for an increasing number of customers, while the amount of configuration required is decreasing, even as we offer more value to the customers. The improvement in earnings clearly demonstrates the versatility of our product platform and the efficiency of our investments, while also reinforcing our view of the scalability of the business. Customer audits have proceeded smoothly without exception, and their number continues to increase. Several customers have emphasized the importance of audits as they transition toward the production phase.

The Pay-Per Treatment (PPT) business continued to grow by more than 100% compared to the corresponding period last year. For certain products, PPT already generates more revenue than the old business model would yield, even if we resold the entire installed base every year. PPT revenue exceeded EUR 1 million in 2025 and showed strong growth during the first quarter. Our objective is to continue this growth in line with our strategy. However, I would like to emphasize that even though we now have more than 80 sites, quarterly variation is likely to continue due to the relatively limited scale of the business, and particularly because the completion of clinical projects almost inevitably leads to a pause of several quarters in treatments because of approval processes.

Our product development pipeline expanded to 36 projects. These projects aim to commercialize our own products. The increase was driven entirely by projects launched with major enterprises that are among the world’s largest in their respective sectors. I am very pleased with the feedback we have received: many of these customers selected us based on both our technology and recommendations from our existing customers. We have also performed well in competition against the largest and most established companies in the industry, particularly due to the uniqueness of our products and our manufacturing capabilities.
The role of Modulight’s own vertically integrated production facility is becoming increasingly emphasized in the current global situation, and it is continuously becoming an even more important competitive factor. This is reflected in a positive momentum both in discussions with pharmaceutical companies and in negotiations concerning other high value-added application-based customer relationships. Our technology and our unique Europe-based manufacturing capabilities have clearly strengthened our customers’ confidence in us when making development decisions related to future products. The majority of our projects are of a nature where the customer commits to us on a long-term basis as their sole technology partner. The United States remains the company’s main focus, and our operations there are developing strongly. We have continued preparations for local production. We see opportunities particularly in flow cytometry, microscopy, the semiconductor industry, quantum technology and the defense industry. In all of these areas, we have globally significant companies as our customers. During the quarter under review, we secured highly interesting project openings, among others in the semiconductor industry, where our lasers appear to be very well suited.

The objective of our strategy period 2026–2027 is strong annual revenue growth and a return to strong profitability. In addition, the goal is to achieve positive cash flow by the end of the strategy period. We expect quarterly-level fluctuation to continue, but the diversification of our customer base and the increasing maturity of our projects provide us with confidence in long-term growth this year and during the strategy period. For this reason, we also issued guidance, according to which we expect growth and improved profitability in 2026 compared to the comparison period. Our growth strategy is heading in the right direction, but we still need slightly more time. We have enhanced our operations and paid special attention to the sufficiency of our cash reserves.”