Rapid Micro Biosystems, Inc. Q3 FY2025 earnings call

• Secured a record multi-system order from a top 20 global biopharma customer in October, with contributions starting in Q4 2025 and extending into 2026+; customer deploying Growth Direct Systems across multiple sites globally and leveraging the platform for various manufacturing modalities.
• Attended the PDA Pharmaceutical Microbiology Conference, confirming industry trend towards automation and validation, and that the Growth Direct platform is suitable for modernizing pharmaceutical manufacturing.
• Collaboration with MilliporeSigma: nearing completion of an initial product supply agreement, attending events like Growth Direct Day and Pharma Lab Congress to engage customers, with benefits from the collaboration expected in 2026.

Total third quarter revenue was $7.8 million. Product revenue was $5.2 million, with consumables increasing 40% to a quarterly record, offsetting a decline in system revenue (5 Growth Direct placements vs. 7 in prior year). Service revenue grew 12% compared to Q3 2024. Recurring revenue, comprising consumables and annual service contracts, increased over 30% year-over-year. Third quarter gross margins were 9%, with service margins at 40% and product margins slightly negative but expected to improve in Q4. Consumables contributed to revenue growth, and recurring revenue was a key driver.

• Raised full year 2025 revenue guidance to at least $33 million, including at least 27 Growth Direct System placements, driven by a large multi-system customer order.
• Q4 consumables revenue expected to step down sequentially, consistent with Q2 levels with variability in customer orders/shipments. Service revenue expected to temporarily step down to ~$2 million in Q4 due to validation timing.
• Expect further meaningful gross margin improvement in 2026 from product cost reductions, manufacturing efficiency initiatives, and benefits from the MilliporeSigma supply collaboration.

Statements made during the call may be forward-looking, and actual results may differ due to factors such as ability to meet guidance, impact of indebtedness, product delivery, market and macroeconomic conditions. Refer to the Risk Factors section of the most recent quarterly report on Form 10-Q for detailed risks.

Q: Thomas Flaten of Lake Street Capital Markets asks about the guidance raise and geographical demand.

A: Sean Wirtjes explains the additive impact of the multi-system order not previously considered and short-term service revenue timing effects.

Q: Thomas Flaten further asks about geographical distribution of demand.

A: Rob Spignesi states demand is generally consistent across regions and the multi-system order is a proxy for end market conditions.

Q: Paul Knight of KeyBanc inquires about multi-system orders and Merck Millipore collaboration.

A: Robert Spignesi talks about striving for ubiquity and more multi-system orders in the pipeline, while Sean Wirtjes explains the cost efficiency journey with Merck Millipore is in the testing/validation phase with benefits expected in second half of 2026.

Q: Brendan Smith of TD Cowen asks about momentum and onshoring.

A: Rob Spignesi notes market resilience with high ROI projects being prioritized, and Sean Wirtjes discusses onshoring timeline as potentially starting in 2026 and increasing in 2027 and beyond.

Q: Rowan on behalf of Dan Arias asks about multi-system order timeline and adjacent markets.

A: Sean Wirtjes explains the timeline for the multi-system order with validations and consumable ramp in second half of 2026, and Rob Spignesi states adjacent market efforts are focused via collaboration with MilliporeSigma targeting fragmented markets with their global sales force.