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Moderna’s Stock Option Tax Benefit Adds 2.6% to 2021 Net Income

Vaccine maker’s soaring stock price helped it pocket an extra $325 million.

February 25, 2022

Shares of Moderna (MRNA), a messenger RNA company, traded near $500 for a time as the company’s Covid-19 vaccine catapulted product sales from $200 million in 2020 to $17.6 billion in 2021. The difference between the grant and exercise prices of an option are tax deductible, resulting in a significant tax benefit to Moderna.

In its latest 10-K, Moderna quantified the impact:

“The excess tax benefits realized from tax deductions from option exercises were $325 million during the year ended December 31, 2021.”

The tax benefit is not insignificant, reducing Moderna’s 2021 tax provision 24.3% and lifting net income 2.6%. Moderna’s shares have plunged recently, reducing the option grant-exercise gap as well as the tax benefit should additional options be exercised. With 2022 revenue expected to grow 16.2% to $22.4 billion and net income margins forecast to decline to 39.4% from 54.6%, the market appears to have taken this into account.

Expect net income margin to top 40% if the stock takes off again.


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