Breaking Down Modular Medical, Inc. (MODD) Financial Health: Key Insights for Investors

You're looking at Modular Medical, Inc. (MODD) right now and seeing a medical device company at a critical inflection point, but the financials tell a story of high-stakes development. For the fiscal year ending March 31, 2025, the company posted $0 in revenue, which is a hard number to stomach, but that's the reality of a pre-commercial business that's all-in on R&D (Research and Development). They burned through a $18.8 million net loss for the year, up from $17.5 million previously, mostly fueled by a 14.1% increase in R&D spending to $14.7 million as they pushed their MODD1 insulin pump toward market. Still, the stock is trading around $0.5193 as of mid-November 2025, near the low end of its $0.4581 to $2.2000 52-week range, so the market is defintely cautious. The big question is whether their $13.1 million cash balance as of March 31, 2025, is enough to carry them past the initial product shipments-planned for the quarter ending September 30, 2025-and into a sustainable revenue model before they need to tap the capital markets again. That's the tightrope walk we need to break down.

Revenue Analysis

You need to understand one critical fact about Modular Medical, Inc. (MODD) right now: it is a pre-revenue company. This means the top-line number-the sales figure-is not the story; the story is the massive investment being made to create that revenue stream.

For the full fiscal year ended March 31, 2025, Modular Medical, Inc. reported $0 in revenue, which is why the year-over-year revenue growth rate from the prior fiscal year is effectively 0%. This is defintely not a growth stock yet; it's a development-stage investment. You are betting on the future product launch, not current sales performance. If you want to dig deeper into who else is making this bet, check out Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?.

Primary Revenue Source: The Insulin Pump Transition

The primary revenue source for Modular Medical, Inc. is about to shift from non-existent to product sales. The entire business model is built around the commercialization of its innovative insulin pumps for the diabetes marketplace. Their initial product, the MODD1 two-part patch pump, received FDA clearance in September 2024.

The company has targeted the quarter ending September 30, 2025, for initial shipments of the MODD1 in a single region, which is when the revenue line will finally start moving. This is the most significant change in the company's financial structure. The immediate revenue will come entirely from this product, with no other segments contributing. They also have a successor product, the Pivot pump, which is expected to launch by March 31, 2026, and will eventually replace the MODD1.

Where the Cash is Going (The Real 'Segments' Right Now)

Since product sales are zero, we look at operating expenses to see the company's focus. Here's the quick math for the fiscal year ended March 31, 2025: Total operating expenses were $19.0 million, up from $17.5 million the previous year. This spending is the true breakdown of the company's current activity, showing where your investment dollars are being deployed.

• Research and Development (R&D): $14.7 million. This is the bulk of the spending, a 14.1% increase year-over-year, driven by personnel and development costs for the pumps.
• General and Administrative (G&A): $4.4 million. This covers the corporate overhead, though it saw a slight decrease.

The table below shows the stark reality: R&D is the only meaningful 'segment' right now. You are paying for development, not product. What this estimate hides is the planned ramp-up in G&A for sales and marketing in fiscal 2026 to support the commercial launch.

Profitability Metrics

You're looking at Modular Medical, Inc. (MODD) and the first thing you need to understand is that their profitability story is currently a development-stage story. Simply put, there are no profit margins to analyze yet because the company is pre-revenue, meaning they are still investing heavily to bring their product to market.

For the fiscal year ended March 31, 2025 (FY 2025), Modular Medical, Inc. reported $0 in revenue. This single fact dictates all their core profitability metrics. Here's the quick math:

• Gross Profit Margin: 0% (Since revenue is zero, gross profit is zero).
• Operating Profit Margin: Not meaningful (Operating Loss of -$19.0 million / Revenue of $0).
• Net Profit Margin: Not meaningful (Net Loss of -$18.8 million / Revenue of $0).

The company is defintely focused on product development, not sales volume, right now. It's an investment-first model.

Trends in Operational Efficiency and Net Loss

While the margins are non-existent, the trend in their losses shows you where the capital is going. Modular Medical, Inc.'s net loss actually widened in FY 2025, reaching -$18.8 million, up from a net loss of -$17.5 million in the previous fiscal year (FY 2024). This isn't a sign of operational failure; it's a sign of a company accelerating its spending to hit commercialization milestones.

The primary driver of this loss is their operational spending (Operating Expenses), which totaled $19.0 million in FY 2025. The vast majority of that is dedicated to innovation-a crucial point for any medical device company.

• Research and Development (R&D): This expense rose 14.1% to $14.7 million in FY 2025, reflecting increased personnel costs and depreciation as they finalized the MODD1 insulin pump and advanced the next-generation Pivot product.
• General and Administrative (G&A): This was $4.4 million, actually decreasing slightly, which is a positive sign of some cost management outside of core R&D.

Industry Comparison and Future Potential

To be fair, comparing a pre-revenue company to established players in the medical device industry is like comparing a blueprint to a skyscraper. However, the contrast highlights the risk and the potential reward.

The US Medtech industry, on average, operates with a healthy operating profit margin of roughly 22%. Modular Medical, Inc.'s -$19.0 million operating loss in FY 2025 is a long way from that benchmark. But what this estimate hides is the potential for high gross margins once they start shipping product.

For context, a competitor like Profound Medical reported a gross margin of 74.3% in the third quarter of 2025. Modular Medical, Inc. has demonstrated similar potential in a prior quarter with a gross margin of 74.5% on a small revenue base. This suggests that once they clear the regulatory and commercialization hurdles and revenue begins to scale, the underlying economics of their product could be very strong.

Here is a snapshot of the core profitability data:

Your next step should be to dig into the commercialization timeline for the MODD1 and Pivot products to estimate when that $0 revenue line will finally move. You can start by reading more on Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

Modular Medical, Inc. (MODD) maintains an extremely conservative approach to financial leverage, which is a common and prudent strategy for a development-stage medical device company. Your takeaway should be this: Modular Medical is overwhelmingly funded by equity, not debt, which provides significant balance sheet flexibility but exposes investors to dilution risk.

The company's debt load is minimal. As of the most recent reporting periods, Modular Medical has approximately $715,000 in total debt on its balance sheet. Critically, the company's annual long-term debt has been reported as essentially $0 (in millions) through the 2025 fiscal year. This means the debt is almost entirely short-term, such as accounts payable or other current liabilities, rather than long-term bank loans or corporate bonds. This is a very clean balance sheet, but it also means the business is not yet at a stage where it can comfortably take on-or needs-large amounts of debt for expansion.

Here's the quick math on their capital structure: Modular Medical's debt-to-equity (D/E) ratio stands at a very low 0.06. This ratio is a measure of a company's financial leverage, showing how much debt is used to finance assets relative to the value of shareholder's equity (book value). To be fair, this is exceptionally low when you compare it to industry standards:

• Modular Medical (MODD) D/E: 0.06
• Biotechnology Industry Average D/E: 0.17
• Surgical/Medical Instruments Industry Average D/E: 0.70 (2024 data)

A ratio of 0.06 tells you Modular Medical is relying almost exclusively on equity financing (shareholder capital) to fund its operations and product development, like the Pivot pump. This low leverage defintely reduces the risk of default, but it comes with a trade-off: shareholder dilution.

The company's financing strategy is heavily skewed toward equity funding, which is typical for a pre-revenue company focused on research, development, and regulatory clearance. They have not had any major debt issuances or refinancing activity because they haven't been using debt to begin with. Instead, they've been very active in the equity markets to raise capital, which is a clear action for investors to track.

For example, in the 2025 fiscal year, Modular Medical raised significant capital through equity-linked transactions:

• A private placement in March 2025 generated approximately $12 million.
• A public offering in November 2024 brought in net proceeds of $7.3 million.
• The exercise of existing warrants in September 2025 generated approximately $4.4 million in gross proceeds.

This pattern of financing-issuing new shares and warrants-is how they maintain that low debt-to-equity ratio. While this keeps the balance sheet safe from crippling interest payments, it means the number of outstanding shares has increased significantly, up 58.46% year-over-year. This constant reliance on equity dilutes the ownership stake of existing shareholders. If you want a deeper dive into who is buying these shares, you should be Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?

The balance is clear: low debt means low financial risk, but the trade-off is high dilution risk until the Pivot pump is commercialized and starts generating enough revenue to fund operations internally.

Liquidity and Solvency

Modular Medical, Inc. (MODD) shows a strong near-term liquidity position, but this strength is entirely dependent on recent capital raises, not operating cash flow. The company is a pre-revenue development-stage firm, so its financial health is a story of cash burn management and successful financing.

You need to look past the high liquidity ratios to the underlying cash flow. The company has a significant cash runway, but its core business is still consuming capital as it moves toward commercialization of its MODD1 and Pivot insulin pumps.

Current and Quick Ratios Signal Short-Term Strength

Modular Medical's liquidity ratios are exceptionally high, which is a clear strength for a company in the R&D phase. As of the third quarter of 2025 (Q3 2025), the company's Current Ratio stood at a very healthy 5.30. This means that for every dollar of current liabilities, MODD has $5.30 in current assets to cover it. The Quick Ratio, which strips out less-liquid inventory, was also robust at 4.04 as of June 2025.

These figures are well above the industry median and signal that Modular Medical has more than enough liquid assets-primarily cash-to meet its short-term obligations over the next 12 months. This is defintely a necessary buffer for a company with no significant product revenue. A high ratio like this is a direct result of capital-raising activities, not sales.

Working Capital Trends and Cash Flow Analysis

The trend in working capital is a direct reflection of the company's financing strategy. While the working capital position is strong (Current Assets minus Current Liabilities), it's being funded externally. The primary trend is a high cash burn rate offset by successful equity financing.

For the quarter ending September 30, 2025, the company's cash flow statement reveals the true nature of its operations. Here's the quick math on the cash movements:

• Operating Cash Flow: -$4.096 million
• Investing Cash Flow: -$0.542 million (Implied from Free Cash Flow of -$4.638M and OCF of -$4.096M)
• Financing Cash Flow: +$7.731 million

The negative operating cash flow (OCF) of -$4.096 million in Q3 2025 is driven by substantial research and development (R&D) and selling, general, and administrative (SG&A) expenses, which totaled $4.854 million for the quarter. This is the cost of developing the Pivot system and preparing for the MODD1 commercial launch, which was planned for the quarter ending September 30, 2025. Investing cash flow is also negative, reflecting capital expenditures like the outstanding purchase orders for machinery and equipment, which were approximately $1.7 million as of September 30, 2025.

The positive cash flow from financing activities, which brought in $7.731 million in Q3 2025, is the critical lifeline. This includes net proceeds of approximately $3.9 million from a September 2025 warrant inducement offering. This financing activity resulted in a net cash increase of $3.093 million for the quarter, leaving the company with an ending cash balance of $6.986 million. The cash balance on March 31, 2025, was even higher at $13.1 million, illustrating the capital consumption rate. For a deeper dive into who is funding this, you should check out Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?

Liquidity Strengths and Concerns

The strength is the current cash position and the high liquidity ratios, which buy the company time to execute its commercialization strategy. The primary concern, however, is the reliance on external funding to cover a sustained negative operating cash flow. The company's future liquidity is entirely tied to its ability to continue raising capital until product revenue scales up.

If the commercial launch of the MODD1 or the regulatory approval of the Pivot product is delayed, the current cash balance will deplete rapidly given the quarterly cash burn rate. The company is structurally capital-light with a low debt-to-equity ratio near 0.09, which is a strength, but it means equity financing is the only real option to sustain operations.

Valuation Analysis

You're looking for a clear signal on Modular Medical, Inc. (MODD), and the data gives us a stark answer: the market currently views MODD as a high-risk, pre-revenue medical device story, which translates to a consensus Sell rating.

The core issue is a lack of profitability, which makes traditional valuation metrics like the price-to-earnings (P/E) ratio irrelevant. Modular Medical, Inc. has a trailing twelve-month (TTM) earnings per share (EPS) of about -$0.51, so its P/E ratio is effectively negative and not a useful comparison tool for investors. Similarly, the enterprise value-to-EBITDA (EV/EBITDA) ratio is also not applicable because the company's LTM EBITDA is a negative -$20.355 million. You can't use a multiple on a loss.

Here's the quick math on what we can use: The price-to-book (P/B) ratio is 2.49. This tells us investors are willing to pay $2.49 for every dollar of the company's book value (assets minus liabilities), which is a premium for a company that is not yet profitable. This premium suggests investors are betting on the future success of their insulin pump technology, the Pivot system, which they recently submitted for FDA clearance. Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?

The stock price trend over the last year defintely shows the risk. As of November 2025, the stock trades around $0.52 per share. Over the last 52 weeks, the stock has fallen by a staggering -76.09%, trading in a range between a low of $0.4581 and a high of $2.2000. That's a massive drop, reflecting both market volatility and the inherent risks of a development-stage medical device company.

What this estimate hides is the cash burn. The market capitalization is only $29.48 million, which is small, but the company's focus on development means it does not pay a dividend. The dividend yield is 0.00%, and there is no payout ratio to analyze because Modular Medical, Inc. is reinvesting all capital into getting its product to market. This is standard for a growth-focused medical tech firm.

The analyst community is clear on the near-term outlook. The consensus rating from Wall Street analysts is a Sell. The predicted downside is severe, with some analysts forecasting a -100.00% drop over the next 12 months, which essentially means they see a high probability of the stock becoming worthless without a major, positive catalyst like FDA approval or a significant capital raise. This isn't a 'hold' situation; it's a binary bet on their product launch.

• Stock Price (Nov 2025): $0.52
• 52-Week Price Change: -76.09%
• P/B Ratio: 2.49
• Analyst Consensus: Sell

Risk Factors

You're looking at Modular Medical, Inc. (MODD) as it transitions from a pure development-stage company to a commercial one, and that shift is where the biggest risks lie. The core issue is simple: they're spending a lot to get to market, but they haven't generated meaningful revenue yet. For the fiscal year ended March 31, 2025, the company reported a Net Loss of a staggering $18.8 million, which is up from the prior year.

This negative cash flow continued into the first half of fiscal 2026, with a net loss of $14.49 million reported for the six months ended September 30, 2025. Here's the quick math: with Research and Development (R&D) expenses alone climbing to $14.7 million in FY 2025, the company is defintely reliant on external capital raises to maintain operations and fund its next-generation product, Pivot.

The Commercialization Gauntlet and Market Headwinds

The biggest external risk is the competitive landscape. Modular Medical, Inc. is entering the insulin pump market against entrenched, well-funded giants. Their success hinges on the adoption of their user-friendly MODD1 pump and the upcoming Pivot system, which targets the $3 billion adult 'almost-pumpers' market.

Beyond competition, the regulatory and reimbursement environment presents a massive hurdle. You can have the best device, but if patients can't afford it or if insurance won't cover it, market penetration stalls. The lack of guaranteed insurance coverage and reimbursement for new products is a major risk that could severely limit the commercial runway, even with FDA clearance.

• Regulatory Wait: The Pivot system, while submitted on November 14, 2025, is still awaiting FDA 510(k) clearance for sale.
• Global Compliance: Obtaining the CE Mark for European expansion is an ongoing, multi-stage process, with the final stages expected later in 2026.
• Supply Chain Volatility: Fluctuations in raw material costs and tariffs due to global supply chain disruptions could erode the potential high gross margins Modular Medical, Inc. is banking on.

Mitigation and Actionable Financial Stability

The good news is that Modular Medical, Inc. has taken steps to mitigate the immediate financial risk. They've managed their balance sheet well, showing a strong current ratio of 4.04 and a low debt-to-equity ratio of just 0.06 as of the end of the last fiscal year. This strong liquidity provides a cushion while they await the Pivot launch in Q1 2026.

Their strategy is to focus on a differentiated go-to-market approach, targeting primary care physicians and diabetes educators, rather than just endocrinologists. Plus, they are investing in patient education, like the gamified training module with Level Ex, to reduce the learning curve and improve long-term adherence. For a deeper look at who is betting on this strategy, you should check out Exploring Modular Medical, Inc. (MODD) Investor Profile: Who's Buying and Why?

The company has validated its high-volume manufacturing line for the Pivot controller, which is a key operational milestone that reduces production risk for the Q1 2026 launch. Still, the investment thesis rests entirely on execution and market acceptance once the Pivot is cleared for sale.

Growth Opportunities

You're looking at Modular Medical, Inc. (MODD) right now, a pre-revenue company, and the immediate question is simple: where does the money come from next? The short answer is a pivot (pun intended) to commercialization, specifically targeting a massive, underserved market with a differentiated product. The path to revenue hinges entirely on their new device, the Pivot pump, and its regulatory clearance.

For the fiscal year ended March 31, 2025, Modular Medical, Inc. reported zero revenue, which is typical for a development-stage company. The financial story is currently one of investment, with a net loss of $18.8 million and an EPS (Earnings Per Share) of -$0.51. This is the cost of building a market entrant, with R&D expenses alone rising to $14.7 million (a 14.1% increase) to push their new product to the finish line.

Product Innovation and Market Expansion

The core growth driver is the next-generation Pivot tubeless patch pump. It's designed to capture the estimated $3 billion market of 'almost-pumpers'-the roughly 70% of insulin-dependent adults who still use multiple daily injections because current pumps are too complex, cumbersome, or costly.

The Pivot pump has three major competitive advantages that address these '3 Cs':

• Flexibility: Two-part detachable design with a 3 ml removable reservoir.
• Simplicity: Bolus capability without needing a separate controller.
• Affordability: A design focused on making high-quality insulin delivery accessible.

Modular Medical, Inc. submitted the Pivot for FDA 510(k) clearance on November 14, 2025, and expects initial commercial launch in Q1 2026 upon approval. They also plan to commence initial shipments of their first cleared product, the MODD1 insulin pump, in the quarter ending September 30, 2025.

Future Revenue Projections and Strategic Partnerships

Near-term revenue projections are minimal but point to a start. For the quarter ended November 14, 2025, consensus expected revenue of $0.40 million, though the actual figure was not available at the time of the report. This initial revenue will come from the MODD1, but the real inflection point is the Pivot launch in 2026.

Here's the quick math on capacity: the initial manufacturing line is validated to serve 6,000 concurrent customers. This is a small, scalable start, not a mass-market flood, which is a realistic approach for a new entrant. They are also strategically partnering with Level Ex to create gamified training modules for the Pivot, integrating the training into the 'Level One' diabetes education game. This is a smart move to lower the barrier to entry for both patients and clinicians, which is defintely a key to market adoption.

The company's strategy is to bypass the traditional 'superuser' market and target Primary Care Physicians (PCPs) through distributors, accessing the 30%+ of multiple daily injection users who rarely see a pump salesperson. You can read more about their core philosophy in their Mission Statement, Vision, & Core Values of Modular Medical, Inc. (MODD).

What this estimate hides is the binary risk of the FDA clearance. If the Pivot is cleared, the growth trajectory changes dramatically; if it's delayed, the cash burn of $18.8 million per year becomes a much bigger problem. Still, their current ratio of 4.04 shows strong liquidity to manage the near-term until clearance.

Next Step: Monitor the FDA's initial feedback on the Pivot submission, expected in Q4 2025, as this will be the first true indicator of the Q1 2026 commercial launch timeline.