Rapid Micro Biosystems Q4 2025 Earnings Report

Rapid Micro Biosystems EPS Results

• Actual EPS: -$0.28
• Consensus EPS: -$0.23
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

Rapid Micro Biosystems Revenue Results

• Actual Revenue: $11.28 million
• Expected Revenue: $10.93 million
• Beat/Miss: Beat by +$349.00 thousand
• YoY Revenue Growth: N/A

Rapid Micro Biosystems Announcement Details

• Quarter: Q4 2025
• Date: 3/12/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, March 12, 2026
• Conference Call Time: 8:30AM ET

Rapid Micro Biosystems (NASDAQ:RPID) develops automated solutions for detecting and monitoring microbial contamination in pharmaceutical, biotechnology, and other regulated manufacturing environments. Its technologies are designed to help companies replace or reduce manual, labor-intensive microbiological testing processes while supporting quality control and regulatory compliance.

The company’s primary offering is the Growth Direct platform, an automated microbial detection system that combines instrumentation, consumables, and software. The platform is intended for applications such as environmental monitoring, water testing, and sterility testing. Rapid Micro Biosystems also provides related services, including implementation support, validation assistance, maintenance, and technical support.

Founded in 2005 and headquartered in Lowell, Massachusetts, Rapid Micro Biosystems serves customers in the biopharmaceutical and pharmaceutical industries, as well as other life sciences and regulated manufacturing markets. Its products are marketed for use in facilities in North America, Europe, and other international regions.

Rapid Micro Biosystems Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Rapid Micro reported a record Q4 with $11.3 million revenue (up 37% YoY) and placed 16 Growth Direct systems in the quarter, finishing 2025 with 190 systems placed (155 fully validated).
• Positive Sentiment: Management set 2026 guidance of $37–$41 million revenue and 30–38 system placements, targeting approximately 20% full‑year gross margin with a Q4 exit in the mid‑20s%, signaling expected margin expansion and growth cadence.
• Negative Sentiment: Q4 product margin was weighed down by a $1.1 million write‑off of unusable consumable inventory, producing a negative overall gross margin for the quarter and contributing to a Q4 net loss of $12.5 million.
• Positive Sentiment: The MilliporeSigma collaboration is progressing (customer demo labs in Europe and Asia) and management says recent procurement agreements and supply‑chain actions will drive meaningful consumable cost reductions that should accelerate gross‑margin improvement in H2 2026.
• Neutral Sentiment: Rapid Micro plans a next‑generation cloud‑native software platform with AI analytics in H2 2026 to enable fleet‑level insights and potential higher‑margin services, but monetization timing and scale remain uncertain.

Presentation

[Operator]

Good day, and thank you for standing by.

[Operator]

Welcome to the Rapid Micro Biosystems Q4 and full year 2025 earnings conference call.

[Operator]

At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded.

[Operator]

I would like to hand the conference over to your first speaker today, Mike Bolyer of Investor Relations. Please go ahead.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

Good morning, and thank you for joining the Rapid Micro Biosystems Q4 and full year 2025 earnings call.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

Joining me on the call are Rob Spignesi, President and Chief Executive Officer, and Sean Wirtjes, Chief Financial Officer. Earlier today, we issued a press release announcing our Q4 and full year 2025 financial results.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

A copy of the release is available on the company's website at rapidmicrobio.com under Investors in the News & Events section. Before we begin, I'd like to remind you that many statements made during this call may be considered forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements including, but not limited to, statements relating to Rapid Micro's financial condition, assumptions regarding future financial performance, anticipated future cash usage, statements relating to the company's term loan facility, guidance for 2026, including revenue, expenses, gross margins, system placements and validation activities, expectations for and plan activities related to Rapid Micro's business development and growth, including the expected benefits from our distribution and collaboration agreement with MilliporeSigma, customer interest and adoption of the Growth Direct System and the impact of the Growth Direct System on their businesses and operations, and statements regarding the potential impact of general macroeconomic conditions on our business and that of our customers.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including our ability to meet publicly announced guidance, the impact of our existing and any future indebtedness on our ability to operate our business, our ability to access any future tranches under our debt facility and to comply with all of its obligations thereunder, our ability to deliver products to customers and recognize revenue, and market and macroeconomic conditions.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

For a more detailed list and description of the risks and uncertainties associated with Rapid Micro Biosystems' business, please refer to the Risk Factors section of our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission as updated from time to time in our subsequent filings with the SEC.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

We urge you to consider these factors, and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance. Please note that today's remarks include certain non-GAAP financial measures. These non-GAAP measures should not be considered in isolation or as a substitute for, or superior to, financial information presented in accordance with GAAP.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

They are provided as supplemental information to enhance investors' understanding of our operating performance and may differ from similarly titled measures used by other companies. Reconciliations between these non-GAAP measures and the most directly comparable GAAP measures are available in our earnings release issued this morning. We encourage you to review these reconciliations carefully. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 12, 2026.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

Rapid Micro disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

[Michael Beaulieu, VP of Investor Relations and Corporate Communications at Rapid Micro Biosystems]

With that, I'll turn the call over to Robert.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Thank you, Michael. Good morning, everyone.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

I will begin with a brief overview of our Q4 performance and recent commercial wins, as well as an update on our key priorities. I'll then share a few comments on our 2026 outlook before turning the call over to Sean for a detailed review of our Q4 financial results and 2026 expectations.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Before reviewing our Q4 results, I'd like to highlight the first press release we issued this morning announcing that Samsung Biologics is expanding its deployment of the Growth Direct platform through a new multi-system order received in the Q1 of 2026.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

This follow-on order builds on our existing strong partnership, and we are proud to support Samsung Biologics' next-generation manufacturing strategy. This expansion yet again highlights the impact that Growth Direct delivers to the world's leading pharmaceutical manufacturers as they seek to automate and modernize their critical quality and manufacturing workflows.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Now, turning to our performance. This morning, we reported total Q4 revenue of $11.3 million, representing 37% year-over-year growth and a quarterly record. These results exceeded the increased guidance we provided in November and mark our thirteenth consecutive quarter of meeting or exceeding expectations. We placed 16 Growth Direct systems in the quarter and ended the year with 190 systems placed globally, of which 155 are fully validated.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

A highlight of the quarter was a record multi-system order from Amgen, reflecting their continued investment in the growth in the global rollout of the Growth Direct platform. Amgen is deploying systems across multiple sites in North America, Europe, and Asia, and fully leveraging all applications to include environmental monitoring, bioburden, and water testing.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Additionally, Amgen will sponsor our first ever North American Growth Direct Day in the Q2. Product revenue increased 78% in the Q4, with outperformance driven by strong system placements. For the full year, consumable revenue increased 17%, reflecting continued strong utilization across our installed base. Consumable growth remains one of the clearest indicators that customers are actively using their systems and realizing meaningful ROI. Importantly, consumable strength underpins recurring revenue, which increased 15% for the full year and accounted for 53% of total revenue, highlighting the durability and visibility of our business model.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Turning to gross margin, Q4 gross margin was impacted by inventory-related charges that Sean will discuss shortly. This does not diminish the significant progress we made throughout 2025 in reducing product costs, improving manufacturing efficiencies, and increasing service productivity.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

As I look back at our performance over the last three years, total gross margin has improved by over 50 percentage points, a trajectory we are confident we can sustain. Now, turning to the MilliporeSigma collaboration. Our partnership is entering its second year, and we are pleased with the progress to date. In support of their commercial growth strategy, we have completed specialist training, and MilliporeSigma has established customer demo labs across Europe and Asia.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

These labs will serve as an important part of the sales process to give customers hands-on experience with the Growth Direct System. As a reminder, Rapid Micro Biosystems operates demo labs in North America, Europe, and Asia as well. We continue to work closely with the MilliporeSigma team as they expand their funnel and drive sales, which we expect will meaningfully contribute to our 2026 system placements.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Turning to our supply chain, we are advancing opportunities to reduce product costs and leverage MilliporeSigma's broader logistics network and other capabilities. Combined with our internal efforts, we have already secured meaningful consumable cost reduction benefits that will positively impact product margins starting in the first half and accelerating in the second half of 2026.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Now, I'd like to briefly review our priorities in 2026 outlook. We are off to a strong start of the year, and our priorities remain consistent. Accelerating system placements, expanding gross margins, continuing to innovate new products, and prudently managing our cash, all while maintaining disciplined and consistent execution. On the commercial front, we remain focused on expanding and converting our sales funnel.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

The multisystem global rollout at Amgen and today's announcement that Samsung Biologics is meaningfully expanding its deployment of the Growth Direct platform underscore the substantial opportunity we see across the global pharmaceutical market. In addition, our partnership with MilliporeSigma continues to complement our direct sales efforts by broadening our global reach in our core pharmaceutical segments and providing access to attractive adjacent customer segments.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

As we work to expand the sales funnel, our annual Growth Direct Day remains one of the most effective customer-focused forums. This year, we are expanding the impact by adding events in North America and Asia. In addition to our premier recurring event in Europe. As a reminder, these sessions bring current and prospective customers together to showcase how automation and improved data management delivered by the Growth Direct can drive meaningful operational improvements and compliance within manufacturing and quality control.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We are especially pleased Amgen will sponsor the North American event in Q2, reflecting their confidence in and commitment to the Growth Direct platform. Looking at the broader market landscape, there are strong tailwinds augmenting our consistent commercial execution. These include increased adoption of full automation, a greater focus on data integrity by industry and regulators, advanced manufacturing modalities driving the need to modernize, and growing investment in the onshoring of pharmaceutical manufacturing in the U.S.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We believe these tailwinds will remain strong and durable, which will contribute to position us well for sustained long-term growth. In addition to staying highly focused on our priorities of accelerating Growth Direct placements and expanding gross margins, we continue to innovate to provide new value-add solutions to our customers.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

To this end, we expect to release our next generation cloud native software platform in the second half of 2026, which will redefine the Growth Direct experience for our customers. Our AI engineers have spent 15 years developing and refining the industry-leading algorithm for microbial growth detection, and this new platform will leverage that experience to deliver significant additional value through AI-driven analytics and insights across our customers' global data.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

As the Growth Direct installed fleet expands globally and generates increasing volumes of digital data, this new software and data platform will provide meaningful value to our customers by enabling deeper insights and faster decision-making power for global quality and manufacturing operations. Against this backdrop, we are initiating full year 2026 revenue guidance of $37 million-$41 million, including 30-38 system placements.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We expect meaningful gross margin expansion and expect to achieve approximately 20% gross margin for the full year, with performance accelerating in the second half. We believe this guidance is both prudent and achievable and reflects our track record of consistent execution. Sean will provide some additional details around the assumptions included in our outlook, as well as potential upside opportunities, and we look forward to updating you as the year progresses.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

With that, I'll turn the call over to Sean to discuss our Q4 performance and 2026 outlook in more detail. Sean?

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Thanks, Robert, and good morning, everyone.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I'll begin my comments this morning with a review of our Q4 2025 results, and then discuss our Q1 and full-year outlook for 2026. We'll then open the call up for questions. Q4 revenue increased 37% to a record $11.3 million, compared to $8.2 million in Q4 2024. During the Q4, we placed 16 Growth Direct systems, which was also a record, compared to six systems in the Q4 last year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We also completed three validations in the quarter compared to four in Q4 last year. Product revenue, which is comprised of systems and consumable revenue, increased 78% to $9.3 million in the Q4, compared to $5.2 million in Q4 2024.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

This was primarily driven by the increase in system placements. Consumable revenue grew 11% in the Q4 compared to Q4 last year. Service revenue was $2 million in the Q4, which was in line with the guidance we provided in November, compared to $3 million in Q4 2024.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

As a reminder, the timing of validations tends to be the largest driver of quarter-to-quarter variability in service revenue, and the validation revenue we generated in Q4 2024 remains a company record. Q4 recurring revenue, which consists of consumables and service contracts, increased 10% to $4.6 million, compared to $4.2 million in Q4 2024.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Non-recurring revenue, which is comprised mainly of systems and validation revenue, increased 65% to $6.7 million. Turning to margin, product margin was -8% in Q4.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

This includes a $1.1 million or 12 percentage point impact related to the write-off of unusable consumable inventory in the period. Our manufacturing team has addressed the underlying situation, and we do not expect any further charges related to this in 2026. Excluding the impact of this write-off, Q4 product margin was positive 4%, which was consistent with our guidance.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Service margins were 22% in the Q4 compared to a record 47% in Q4 last year. The lower service margins in Q4 this year were due to the lower service revenue in the period, which more than offset the positive impact of service productivity improvements and cost reductions made during 2025.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

On a combined basis, Q4 gross margin was -$0.3 million or -3% compared to $1 million or 12% in Q4 last year. Excluding the impact of the inventory-related charges we recorded in the period, total Q4 gross margin was 7%. This was in line with our guidance and slightly lower than the Q4 last year due to the impact of lower service revenue on service margins.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Moving down the P&L, total operating expenses were $11.9 million in the Q4 compared to $11.2 million in Q4 2024. Within OpEx, R&D expenses were $3.2 million, sales and marketing expenses were $3.3 million, and G&A expenses were $5.3 million.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

For the full year, total operating expenses decreased by 3% while revenue increased by 20%. Interest income was $0.5 million, and interest expense was $0.8 million in the Q4. Q4 net loss was $12.5 million. This compares to a net loss of $9.7 million in Q4 last year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

The larger net loss in Q4 this year was primarily attributable to the inventory charges we recorded, as well as the lower service margin and higher interest expense in the period. Net loss per share was $0.28 in Q4, compared to net loss per share of $0.22 in the prior year quarter.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

With respect to non-cash expenses and capital expenditures, depreciation and amortization expenses were $0.8 million, stock compensation expense was $0.6 million, and capital expenditures were $0.1 million in the Q4. We ended the year with $39 million in cash and investments, which was in line with our guidance, as well as $25 million of unused capacity under our debt facility with Trinity Capital.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Our net cash burn was $3 million in Q4. As a reminder, Q4 is typically our lowest burn quarter, while Q1 is typically our highest burn quarter each year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Now I'll turn to our 2026 outlook. For the full year 2026, we expect total revenue to be in a range of $37 million-$41 million, which assumes we place between 30 and 38 systems.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

This system placement range reflects a few key variables.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

First, our guidance continues to account for some ongoing uncertainty around the timing and scale of customer purchase decisions, particularly with respect to larger multisystem opportunities which often involve more complex purchasing considerations.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Second, the low end of our guidance range assumes we do not place any new large multisystem orders in 2026 other than the Samsung order announced this morning.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Third, we continue to expect MilliporeSigma to contribute meaningfully to system placements in 2026.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

However, the low end of our guidance range does not assume they satisfy their full year two system commitment since some of those systems may be placed in Q1 2027.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

For Q1, we expect revenue of at least $7.5 million, including at least five system placements.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Consistent with historical trends, we expect at least 30% of our system placements to be made in the first half of the year, with the remainder in the second half. We also expect revenue and placements to peak in Q4 in line with typical seasonality.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Turning to consumables, we expect revenue in Q1 and Q2 2026 to be slightly higher than Q4 2025, and then increase gradually over the remaining quarters with variability driven by the timing of customer orders and shipments.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Looking at service, we expect revenue between $2.3 million and $2.6 million in Q1. We then expect service revenue to step down slightly in Q2, followed by meaningful increases in Q3 and again in Q4 based on our current expectations with respect to the timing of installation and validation activities.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We expect to complete at least 25 validations in 2026, with at least 3 in the Q1. Turning to margins, we expect our Q1 gross margin as a percentage of revenue to be in the mid-single digits with product margin of negative single digits and service margin above 30%.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

There after, we expect to reach and maintain positive product gross margin in each of the remaining quarters of 2026, led by improving consumable gross margin, which we expect to turn positive in the second half of the year as we fully realize the benefit of meaningful material cost reductions we recently locked in, as well as benefits from other cost reduction in manufacturing and efficiency initiatives.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

For the full year, we expect total gross margin of approximately 20% with a Q4 exit rate in the mid-20% range or better, product margin in the high single digits% to low teens%, and service margin above 40%. Consistent with prior years, we expect quarter-to-quarter variability in gross margin to be driven by progress on our product cost reduction and service productivity initiatives, overall revenue volumes, and the revenue mix between systems, consumables and service in each period.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We expect operating expenses to be between $47 million and $51 million for the full year. We expect $10 million in non-cash expenses, including depreciation and amortization expense of $3 million and stock compensation expense of $7 million. We also expect CapEx of $2 million, interest income of $1 million, and interest expense of $2 million.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Looking further ahead, our strategic priorities of accelerating system placements, improving gross margin, innovating new products, and prudently managing our cash remain unchanged.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We continue to build momentum in our business, including our partnership with MilliporeSigma, which we expect will further accelerate progress on these strategic priorities over the coming years, including the meaningful contribution to system placements we've incorporated into our guidance for this year. That concludes my comments.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

At this point, we'll open the call up for questions. Operator?

[Operator]

Thank you.

[Operator]

At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again.

[Operator]

Please stand by while we compile the Q&A roster.

[Operator]

Our first question comes from the line of Thomas Flaten of Lake Street Capital Markets. Your line is now open.

[Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets]

Hey, good morning. I appreciate you taking the questions.

[Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets]

Thanks, Sean, for all the detail on the guide. The gap between placed and validated systems has widened since 2023. What are you guys doing to or are you doing anything to shrink that gap over time?

[Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets]

Is that just more engineers to complete the validation? Can you help us think about that a little bit?

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Yeah, Thomas, I'll take a shot at that. I think part of that, a lot of that has to do with timing, actually, in terms of there can be variation between when we deliver a system and when that validation process gets started, depending on the customer's plans and resourcing that goes along with that.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I think we'd expect to see that come down. I think we talked about Amgen this time. I think as we look at that some of the color we gave in the call, prepared remarks really ties into how we expect that to roll out, which I think the majority of that work is right now our plan working with them would be that a lot of that would happen at the end of this year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I think if you look at a deal like that, the expectation would be you'll see that placed in Q4 last year. We'll get most, if not all of that work done with them by the end of this year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

That gives you some indication of how these things can typically go. There is a natural lag in there. I think you'll see that variance come back in a bit as we work through that and a few other customer situations. It's nothing we're concerned about. It is something we keep our eyes on, and it's something that we will continue to work to keep tight as much as we can.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I don't know, Robert, if you have any comments.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

No, it's clearly a robust validation year as well. You can see that backlog being worked. Some of this is, to Sean's point, driven by order timing, size and timing of orders and just the sequencing of our team and our customers' teams and working through the validations.

[Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets]

That's great. I appreciate that color. Just with the Samsung announcement this morning, could you just comment on the percentage of your placed systems that are within CDMOs and how you see that space evolving over time relative to the manufacturer or to the drug originators themselves?

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Yeah. It's interesting. Well, I don't know the exact percentage, so I don't want to put that out, but it's sizable. We've previously announced Lonza is a customer, Samsung. We've obviously and other CDMOs as well. We have a very strong value proposition for CDMOs as well as probably called principal manufacturers.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We're growing. Clearly today's a good example of both Amgen and Samsung. You've got both a principal manufacturer and a CDMO. CDMOs in particular benefit from our ability to turn their lines faster or at least produce faster.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

also, to a certain extent, in some cases, market the use of advanced technologies in their quality control and manufacturing operations. Yeah, quite strong in CDMOs, and we plan to stay that way and grow with the CDMO space. We don't talk about it significantly on these calls. We also have small and mid CDMOs globally as well.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Generally it's a very strong segment for us as well as the principal manufacturers. I can't say one is stronger than the other. They're both strong right now, and we tend to be in both segments, as we've said, generally, more in the advanced modalities, primarily biologics and also in the cell and gene categories within CDMOs and principal manufacturers.

[Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets]

That's great. Appreciate that. Thanks, guys.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Sure. Thank you.

[Operator]

Thank you. One moment for our next question.

[Operator]

Our next question comes from the line of Dan Arias of Stifel. Your line is now open.

[Dan Arias, Managing Director at Stifel]

Hey, good morning, guys.

[Dan Arias, Managing Director at Stifel]

Thanks. Sean, on gross margins, where is the confidence in the 20% number for 2026? Kinda felt like a good 4Q number would be the jumping off point for what you're going to do this year. I understand it was due to an inventory charge, but the number is sort of the number.

[Dan Arias, Managing Director at Stifel]

What are the key moving pieces and risks when it comes to your own process? As we think about product gross margins being back to negative in 2Q, how do we get comfortable with the idea that as we start to feel better about placement momentum, which has been good, we can also feel good about gross margins, that there doesn't have to be an offset there?

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Yes. I'll take that one, Dan. I thinking about it, there's a couple key drivers to focus on from my perspective.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

One is, I talked through my comments about the fact that we have recently locked in some meaningful product cost reductions with some vendors that will benefit us beginning in Q2, but that'll accelerate in Q3 and Q4. So that is a substantial reduction from what we're paying for some of the key materials in our product, and that's consumables specifically. So that's number one.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Number two I'd say is I talked a minute ago about how we expect the year to roll out from a validation and service revenue standpoint.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

You kinda see in recent quarters what lower service revenues can do from a leverage standpoint in our service margins. We expect to see that go back the other way as we work our way through this year. To get to 20%, I think the two of the largest drivers, if not the largest drivers, are, that those cost reductions kinda kicking in full bore in the second half and us getting our service revenues back up to levels where they can generate, meaningful margins beyond where we've been over the past quarter or two. Volume is also a big part of it.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

As we progress through the year, we're manufacturing more, we expect to sell more. I talked about peaking in placements in Q4. Those things also contribute.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I think it's important to note the comment that we expect Q4 exit to be mid-20s% or above.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

That trend should be growing as we work our way through the year overall for total margins. Those are the kind of key factors that give us confidence in being able to achieve those kinds of numbers for the year and exiting the year.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Yeah. Dan, just to put maybe an exclamation point on one thing Sean said, on the product cost in particular, with regard to execution risk, we have contractual.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Yep.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Agreements in place with the supply base, which is meaningful with regard to how we get comfortable and confident in that cost out, in addition to the other elements that Sean mentioned.

[Dan Arias, Managing Director at Stifel]

Yep. Okay. That's helpful. All right, and then maybe on these systems to Samsung and Amgen, how do you see utilization ramping there? And then just on overall utilization, can you maybe just talk to consumables pull-through per system?

[Dan Arias, Managing Director at Stifel]

Consumables growth has been pretty good here. We all presumably have this placement and pull-through driven model. So Sean, we've talked a little bit about this. Can you just maybe set a baseline for where 2025 pull-through came in, and then to what extent that number might be higher in 2026?

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I guess on the first question, Dan, yeah, I think, in terms of what will happen with Amgen and Samsung in terms of pull-through, I think I talked about Amgen a little bit ago latter part of the year, likely when we get those fully validated. Samsung, I don't know that we have a fixed timetable for that yet, but I'm sure, it kind of follows that similar timeline, would be my best guess.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

In terms of where we get with them, I think validations are definitely in play for 2026, our expectation, frankly. In terms of when they start to contribute to recurring revenue, I'd expect that to be more a 2027 factor.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

In terms of pull-through, yeah, I think we've continued recently, I'd say, to be kind of in that single digit year-over-year improvement range that we've talked about historically. I'd expect that will be similar. I think with big orders and kind of a bolus of validations like we're talking about with these larger orders, I think there is an opportunity for us to see more meaningful step-ups in that as we bring those systems online, kind of in short periods of time. For now, I'd say think about it as single digits in 2026. I think as we look at 2027, that we would potentially have opportunity to see a bigger step up than that in 2027.

[Dan Arias, Managing Director at Stifel]

Okay. Very good. Thank you, guys.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Thanks.

[Operator]

Thank you. One moment for our next question.

[Operator]

Our next question comes from the line of Ann-Kate Heller of KeyBank. Your line is now open.

[Ann-Kate Heller, Analyst at KeyBank]

Hi. Thanks for taking my question, and congrats on the quarter and the exciting announcement with Samsung. Maybe to start.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Thanks, Ann.

[Ann-Kate Heller, Analyst at KeyBank]

Do you think you could share more insight on the Samsung multi-system order? Maybe would you say it's fair that this is in the double-digit range, and should we expect this to roll out over the course of 2026 or just Q1? Just also on this, more on the strategy, is this one site, is this part of the global rollout or maybe a therapeutic area? I have one follow-up. Thank you.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Yeah. Generally, on Samsung, we won't get into the specific quantum of it, but it's a next phase of rollout. I think many of you may remember we had the initial launch with Samsung a couple years ago.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

This is a second wave, which is actually a larger order size, and it's focused primarily on their principal area in South Korea. Although some of you may know that Samsung is also acquiring around the world, so those are also in scope. As I mentioned a couple of years ago, we expect to grow with Samsung in the quarters and years ahead. I'll say it again, we expect to grow with Samsung in the quarters and years ahead.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Interestingly, which we didn't talk about in the prepared remarks, but we're also discussing other collaboration opportunities with Samsung, which we're quite excited about. More to follow on that. Part B, Anna?

[Ann-Kate Heller, Analyst at KeyBank]

Okay, perfect. My second question, just more in general on repeat orders versus new customers. Do you expect these customers, repeat customers like Samsung to move through your pipeline quicker? Just in terms of validation, is that usually a quarter lag or what should we expect, both from Samsung and just repeat customers in general?

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Yeah. A general rule of thumb is repeat customers go faster, generally, both in the sales process and the validation process. It's a general takeaway. Now, certain things like some of these large orders amgen is an example and other large customers we haven't specifically mentioned by name, across several sites around the world the sites have projects going on any given time.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

The timing could be throttled by a a site-based activity, but generally it's quite faster. Generally, we have what's called a modular validation, which basically leverages the knowledge and work we've done on the initial validation usually at a starter site, and we can roll that out in an expedited fashion to accelerate the process.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

as you may imagine, our land-and-expand strategy is focused on that. Also to your point, the team's also out there focused on acquiring new customers as well, which can be a bit longer both in the sales process and the initial validation.

[Ann-Kate Heller, Analyst at KeyBank]

Perfect. Thank you.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Thank you.

[Operator]

Thank you. One moment for our next question. Our last question comes from the line of Brendan Smith of TD Cowen. Your line is now open.

[Brendan Smith, Tools/Dx Analyst at TD Cowen]

Great. Thanks for taking the questions, guys. I wanted to actually first ask about the kinda next gen cloud native software platform you referenced in the prepared remarks. Can you maybe just give us a bit more color on how this gets integrated into devices moving forward? Is this something that all new orders will automatically include some of these analytics capabilities?

[Brendan Smith, Tools/Dx Analyst at TD Cowen]

Is it a software update push you can monetize into existing install bases? Just kinda wondering how we should think about that contributing to growth. Thanks.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Yeah. Thanks for the question, Brendan. Think of it as a bit of a phased approach. Out of the box, it's a complete rewrite of our application software for the Growth Direct. It's a completely different architecture. Day one, customers benefit from a modern UI, much easier integration into some of their IT infrastructure. By cloud native, it's been built around a cloud infrastructure.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We envision the customer's cloud will run it, but from a future revenue standpoint, we could also provide cloud services. Right now, the system is in a pre-launch phase with a major customer operating in their cloud running the Growth Directs, and the feedback has been exceptional.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

We're quite excited about that. Out of the box, a couple of benefits. first a complete rewrite, so customers benefit from easier navigation, easier integration a more modern UI, the ability to access data from the cloud from any device, versus through their IT infrastructure, attached to their LIMS. Over time, we see the ability to provide services against that cloud data.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Imagine a fleet of Growth Directs generating. The idea came from, we have these Growth Directs around the world generating all this data, how can we help customers benefit from that? The Growth Direct would be effectively an appliance. Other technologies can also plug into this technology and feeds into a cloud infrastructure.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Then against that, we could provide services against that. Predictive analytics other types of insights on seasonality, quality failures potentially, speciation and id services.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

That's really part of the vision. We're not going to get into too much detail on what those are and how we plan to monetize it, but think of this as step one to a couple step multiyear process to really advance from the automation side into the, I'll call it the AI sort of higher powered, analytics and cloud-enabled side of our business, or the goal is to continue to drive to recurring, a high margin recurring revenue over time. What we've seen is that customers are in.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

especially in pharma, which can be a little conservative, are open to discussing how AI and cloud in particular can enable their environment. So we're not really pushing against a closed door. It's really. It feels like we're pushing against an open door, and in some cases, customers are asking us for services in this general category.

[Brendan Smith, Tools/Dx Analyst at TD Cowen]

Got it. Super helpful. Thanks. Maybe just one last one on some of the consumable cost reduction benefits I think you guys spoke to starting to see now. Can you maybe just expand a bit on what some of the moves you guys have made on your side, even within the MilliporeSigma network I know you referenced, maybe what else you're planning there this year to kinda drive the added reduction in the second half? Thanks.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

Yeah. Hey, Brendan, it's Sean. Yeah, so we are still working with MilliporeSigma on several different opportunities. I think some could benefit this year. Some are more longer term focused in terms of things we could do as we've talked about in the past, it's quite a broad palette of things that we're looking at in terms of things that could benefit our margins, not just material cost reduction.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

I'd say the locked-in savings that we have at this point that are going to benefit consumables in 2026 are not with MilliporeSigma directly, but they are things that are direct inputs with other vendors that we have in place that our procurement team has done a really good job with kind of leveraging our growth, leveraging other relationships to be able to get us what I would say is kind of a step change reduction in cost for a couple of different key inputs into the material that will benefit us this year.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We're excited about that. As I said earlier, it's going to be a key driver of our gross consumable margin expansion by association overall gross margin expansion.

[Sean Wirtjes, CFO at Rapid Micro Biosystems]

We think it's something that we can use as a template to drive future reductions in other areas in the future and continue to drive those consumable margins up.

[Brendan Smith, Tools/Dx Analyst at TD Cowen]

Got it. Makes sense. Thanks, guys.

[Robert Spignesi, CEO and President at Rapid Micro Biosystems]

Okay. Thanks, Brendan. Well, thanks everyone for your time and attention. We'll wrap the call up at this point. Thanks again and look forward to speaking with many of you shortly.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Michael Beaulieu, VP of Investor Relations and Corporate Communications
• Robert Spignesi, CEO and President
• Sean Wirtjes, CFO

Analysts

• Ann-Kate Heller, Analyst at KeyBank
• Brendan Smith, Tools/Dx Analyst at TD Cowen
• Dan Arias, Managing Director at Stifel
• Thomas Flaten, Senior Research Analyst at Lake Street Capital Markets