RPID - Earnings call transcript Q4 2024 | Rapid Micro Biosystems, Inc.

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Operator

Thank you for standing by. My name is [ Alyssa ], and I will be your conference operator today. At this time, I would like to welcome everyone to the Rapid Micro Biosystems' Fourth Quarter and Full Year 2024 Earnings Conference Call.

[Operator Instructions] I would now like to turn the call over to Mike Beaulieu. Please go ahead.

Michael Beaulieu

you Full the Year thank Fourth Micro and and Quarter XXXX morning, for Rapid joining Biosystems' Good Earnings Call.

the and Financial on Chief me call Spignesi, Rob Joining President Executive Officer; Sean Officer. Chief Wirtjes, are and

Earlier quarter financial full fourth announcing and issued today, year a we release our press results. XXXX

both release, MilliporeSigma. in operates the are Merck Distribution KGaA, under releases Germany, announced which and Copies Science Collaboration company's Additionally, last rapidmicrobio.com section. we Life of night, Agreement the News business as U.S. in of a separate the at on a with the Events available and Darmstadt, website in Investors

laws, Before I'd to the are harbor begin, considered many may XXXX. made provisions you that safe be Securities Private of of statements securities made forward-looking Act statements we meaning Litigation which to this the Reform call like pursuant during within the remind federal of

to including, expenses, assumptions or limited cash Any to, relate to anticipated revenue, performance, for statements expectations usage, relating Micro's margins, this that future guidance contained XXXX, but not call future financial Rapid including predictions, gross financial in statements our adoption regarding and announced Agreement, system for validation activities, including activities and Rapid planned to Distribution and Micro's of Sterility. and the placements regarding business Growth and customer statements growth, and interest Rapid Collaboration development system related expectations recently Direct condition,

implied forward-looking statements the expressed due in may variety results or from a of materially Actual factors. those differ to

as a Securities associated We you the Form be risks filings the to aware on most Commission subsequent these should uncertainties Risk urge with not only you guarantee and quarterly our should these from time consider of of with of refer future filed to time Micro's our section recent description and XX-Q Exchange estimates are performance. and statements with that updated and list be factors, a considered the the Factors in business, SEC. Rapid For please to and report

the to by information or whether live events XX, and disclaims any as or required projections is revise Rapid because broadcast or Micro intention contains accurate of any new law, February XXXX. update only otherwise. statements, of or as call information, future conference time-sensitive forward-looking The financial today, except obligation,

that, with Rob. over call the to I'll And turn

Robert Spignesi

Good before our and prepared our you, I with overview joining of discuss morning. will global provide a in our us. this begin Thank fourth performance as turning call XXXX we everyone, you will and thank morning, I and announced Distribution for remarks then to who our Mike. quarter release a XXXX over press financial my Collaboration night highlights results announced outlook. of and review detailed the Agreement will Sean, last the more brief

systems fully year. quarter. a revenue to in basis, placements year fourth was including globally, was revenue of representing bringing XXX XXX cumulative prior million and systems XX% our now $X.X QX, a XX Growth XX% compared X We On through total record. system for XXXX, Direct placed validated the end have we systems. full Growth the Direct of to $X.X placed quarter, the the quarterly million, in Recurring growth growth representing year-over-year Total

guidance the our XXXX. the meeting continued of business. reflects marks and margins fourth for up progress XX%, exceeding well quarter quarter positions cost enhanced percentage year Fourth in leverage or the a quarter operating and gross from quarter. in and our performance consecutive in structure improved compared X% improvement revenue to improving sequentially This ninth The point quarter XX prior to us strong third our

partner MilliporeSigma begin, as some Micro and into Collaboration global believe our will for which night's agreement Distribution Now the I'll operates I Biosystems. Science of turn announcing press decision an around U.S. MilliporeSigma. this why enter in to strategic release excellent and business with Life our Germany, provide to Merck KGaA, we Rapid Agreement context last To Darmstadt, the is

comprehensive global the product in Micro life pharmaceutical and offering a segment and with experience quality selling As a extensive portfolio, shares long-standing Rapid supported base Bio, pharmaceutical sciences, MilliporeSigma customer common complementary organization deep relationships and control into in a commercial manufacturing. an with leader by

also Moreover, segments as adjacent medical Growth among priority and top with aligns care devices, strongly This serves of MilliporeSigma such personal accelerating system placements. Direct our others.

gross as costs with our to reduce margins. life opportunities and sciences of global a partnership to accelerate Additionally, bring presents supplier our this to product chain efficiencies industry, the supply MilliporeSigma goal to improving

innovation Finally, and new develop technologies this drive partnership creates and opportunities products. to

So system sell me reaches has medical devices, to global for with related which provide MilliporeSigma such Growth of that long-term objectives. care, Their agreement. partnership, global with pharma this let context consumables. beverage the Direct and and biologics into personal the manufacturing Rapid network, as beyond markets cosmetics and rights co-exclusive Micro's as now growth traditional more extensive well adjacent commercial food details aligns and key

with By customers. leveraging and they reach, existing MilliporeSigma's accessibility scale significantly new and we Direct's attract expand enhance expertise, will customers Growth expect

markets will increase Direct's addressable market. adjacent these to substantially access Additionally, Growth total

For systems. is expect Growth X-year year, commitment the number and it have in to heavily has a of XXXX. committed Direct This a of purchase towards agreement, weighted X first minimum we MilliporeSigma years meaningful this second impact to the

team will sales time, global Direct and sell to existing full At distribution the throughout the direct systems. to same Micro agreement, utilize term and of and continue Growth channels the place Rapid its

Direct will to to Growth and the service systems all sells. also validate we Importantly, systems continue include MilliporeSigma

may of logistics this Micro to accelerate to our A media, bring between as packaging. Rapid key as and areas gross our a margin include and of to chain supply warehousing sterilization, goal well Initial commitment culture identify consumables, this component joint opportunities improvement. is MilliporeSigma to for efficiencies collaboration plastic agreement focus

upon We sustainable progress this improvements our incremental recent gross deliver are and collaborative and will that confident approach build in margin.

this of customer a service joint and create of lastly, products with benefit margin for agreement to And and respected highly We colleagues expansion with MilliporeSigma revenue enhancement and and the week, in multi-day industry. opportunities enables leader a and of existing could the collaboration excited life partner on planning more held be new our offerings workflows we products, recognized additional development such meeting opportunities. sciences not and to kickoff

Growth Direct combines Rapid scale, technology and industry agreement strength Micro's leadership. This MilliporeSigma's with brand global platform market-leading

We worldwide are while will placements, improving priorities accelerating margins driving value our system of customers this gross advancing innovation. meaningfully collaboration and confident Direct to Growth enhance

turning call over like Before my XXXX. perspective on the to Sean, for I'd outlook to our share

Our priorities this with year XXXX. remain consistent

accelerating Our Growth remains top priority system Direct placements.

margins. Second, we on gross focused improving remain

commercializing developing Third, we innovative and are committed products. new to

cash we Lastly, a our and balance strong sheet. prudently to continue maintain will manage

Growth confidence Our the that successful industry and industry standard emulate. cell to are in their reinforces of across platform with end-to-end using manufacturing for resulted provides network we which clear and our blueprint global environmental collaboration process QC automation the Direct the a Lonza, monitoring the gene

multisystem customers multiple rollouts. with have plans similar for funnel sales We global in our

includes this to growing faster for critical a This by test. results Rapid sales which for being Sterility, end-of-line driven time is its value for also funnel automation and full proposition

to and reduce expect inflection gross product building we manufacturing service improve XXXX, costs, half second enhance In improve upon XXXX our programs efficiencies our by margins productivity. to and continuing

further with gains in operating leverage we cash expect remain we We as disciplined and move management. forward will

contribute is not our revenue XXXX, MilliporeSigma in While any we assuming to for in potential outlook. contribution we are believe there to

impact driving and we achievable updating believe transformative in both the to system margin expect have beyond. placement we benefits look prudent outlook a priorities, to you With progresses. in However, our is and meaningful partnership mind, the and and include on improvement to this forward business as XXXX our this year

sustained In drive our value the partnership shareholder position advantages our to MilliporeSigma business, beyond. customers us value continued closing, focus significant strength delivering believe in the and and we of to of creation XXXX underlying our with on

over to fourth And detail. our with that, quarter call Sean the I to turn in and Sean? outlook will performance now discuss more

Sean Wirtjes

Thanks, morning, and Rob, quarter of then a and discuss fourth our everyone. for year begin morning I'll XXXX our with results and quarter comments full good outlook review XXXX. this my first

will We call for questions. up open the then

compared record to XX% increased QX million revenue $X.X XXXX. a quarter to in Fourth million $X.X

placed Growth fourth the the systems, last fourth was quarter Direct we which consistent with During year. X quarter,

Product the systems X compared quarter fourth QX million last X XX% comprised QX XX% XXXX. We which QX in $X.X last over compared quarter by increased to consumables, year. compared the to to $X.X to is revenue in completed also the in grew revenue, in million Consumable validations year. quarter and in of fourth

Service recurring by revenue of which is comprised to million. quarter consumables fourth XX% contracts to QX $X.X and growth and quarter consists the $X service Fourth XXXX. revenue, increased XX% increased million revenue, revenue driven Nonrecurring to field and million service compared systems double-digit validation in This revenue, $X.X was and contracts. in mainly which to $X million. of increased across service XX% validation services,

$X.X in our XXXX. improvement product to initiatives margins the was fourth were costs. to in Turning or business. in X% by point or million XX% negative margins continued headcount reduction Service as to XX% year. improvement XX% service-related to gross were on and compared manufacturing The fourth a negative last and quarter increased efficiencies in quarter Product record QX million cost QX largely lower percentage productivity due $X.X The and was margins. other progress the XX compared as consumables revenue in well higher driven

combined X% to Of were were a last full year quarter compared On $X fourth compared the in record XX% to basis, a gross QX margins or million XXXX. margins effectively note, million gross year year. XXXX negative full $X.X for negative negative or XX% breakeven

substantial on X of margins years remain pleased with course we've on are driving forward. We and past incremental improvement moving progress made laser-focused the significant over the the

Moving from mainly XXXX. which were operating increase $X.X decrease X%, quarter, product benefits expenses program the OpEx, development in down X% P&L. new $XX.X announced due of Within in activities. million XXXX, R&D efficiency with representing August to the $XX fourth a representing expenses million we were of operational the was associated largely million, Total an in QX from

representing was XX% compared year. to million, quarter. headcount-related million were of was QX. of million, million prior in in Sales share to costs. and Net Net year in QX mainly a were loss last $X.XX $X.X decrease representing due X% $XX.X expenses loss of net QX per loss expenses This a $X.X of marketing $X.XX the compares share in G&A decrease to $X and per a net lower loss

expenditures, expenses capital year expenses million was million, ended and quarter. were and expenditures and in depreciation expense fourth the We $X.X in $XX approximately noncash and capital the amortization with million to $X.X investments. stock cash respect compensation $X.X were With million

I'll to XXXX Now turn our outlook.

revenue and is scale our sales believe involve uncertainty and We does around particularly this placements not processes. cycle. to prudent some larger to account often in we multisystem MilliporeSigma assume contribute decisions, ongoing the does complex such and which more our XXXX, guidance Conversely, potential believe there system contribution. given purchasing any guidance While considerations timing of customer is opportunities, initial purchase our for respect with to typical for

revenue full $XX we as system expect context, least XXXX with XX With between year that and million total of XX placements. at

least at of QX million, including typical at higher the sequential decline QX revenue X and than QX peak and in revenue QX expect least QX $X.X consistent with expect be seasonality. from We then with placements and placements, system then We to QX. in

respect to at with likely the we remaining is which our timing be from expect million in revenue consumables be the Looking $X between revenue service to to down With and of activities. revenue the QX. $X.X step in validation primarily due highest we slightly consumables, driven QX, orders expect to higher the service, to revenue and year, We be quarter to in customer of million expect QX then than timing QX quarters variability by shipments.

at We quarter. to the XXXX in validations with in XX complete least least expect first at X

margins. to Turning

than be to mentioned QX impact margins slightly positive gross QX due lower to seasonality I the but expect earlier. revenue We

Thereafter, expect and initiatives, on to productivity our service product quarter overall variability we maintain our systems, positive with gross in and revenue period. cost volumes each consumables succeeding the by driven in margin reduction service outlook, XXXX, revenue between mix each progress revenue on based of and

the year single we high percentage full of to teens. digits margin in to range be low as gross the expect For a revenue of XXXX,

expenses full XXXX. program expect August operating and million to for full reflects of efficiency in between the we We year, from $XX the announced effect operational the which be $XX million savings

which $X million depreciation expense of amortization of $X million, other expense income, CapEx $X is income million. stock interest and of expect comprised of million, primarily of We $X compensation and

compared Finally, full $XX XXXX, year which reduction we burn roughly our expect million for to million in cash would in burn be XXXX. cash a the $XX to roughly

MilliporeSigma in gross progress and managing Building accelerate Collaboration beginning Looking new our further on placements, potential innovating cash priorities with to on our coming unchanged. has our improving ahead, believe that Distribution placements system we a these XXXX. of our momentum, products strategic including priorities prudently to meaningful remain the and Agreement contribution the over accelerating strategic system years, margins, further

my concludes comments. That

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

Operator

[Operator Instructions] Your line of first Stifel. question comes of Dan Arias from the

Daniel Arias

seems maybe sooner guys just think now? you're of have the but could ground the into out, I'm doing? new not and of to those see you you're I that be some about Rob, not do on strategically these if and that the you sure currently think some entry open whether mean your the set that nontraditional running it you areas focused corners accelerates focus that on relationship opportunity when Millipore the like things hitting right as you helping you you of move resources

Robert Spignesi

Dan, do. the answer question. quick I is, appreciate I And the yes,

gene, adjacent been we've care et our meaningful as and med focused such markets in So manufacturing, pharma personal biologics size. in cetera. there's cosmetics But device given on and in that and discussed previous as and calls, pharmaceutical we've focus cell and are

fundamental markets. And is in strategy the a, a behind So is the adjacent say, well that the MilliporeSigma I'd relationship. those in plank positioned team

Daniel Arias

Okay.

Okay. on like with than than the better guide year, you XXXX think here nice placement outlook did of And Most was the systems in even higher. spending only It the it you year. pharma better is low actually last and have midpoint instrument no looks the people is Sean, X the situation a for in end what then, Lonza. is the win

are You've they're if at in the not picture, there. in 'XX, least at helping got they in Millipore the least picture,

something 'XX So sure to like prudence be for here a material help components the idea seems just not to 'XX. ] I'm would me it mean more. want with certainly something but obviously, here, got element missing I [ the outlook. an the make good of they've is to that I --

Sean Wirtjes

Dan. Yes. Sure, Yes.

said think, our you and words guidance. come our think goal, I there, prudent key philosophy we kind So one the the our of new I of achievable. and as set into That's year

in are process. The of we've the past. seeing of what think bar kind seen environment, still terms customers to purchasing tends at around changes from think it a broader 'XX times are don't operating the certain we how I little than higher in I be meaningful in the was in

to continuing point. that, that don't meaningful this in monitor seen improvement I we're So any but think we've at

assumption And this baked into that guidance. is

on think it I script. in the we touched

sales opportunity for not anything MilliporeSigma. importantly, very them months think but there, can cycle going time are to think XX our plus. to I it's do Obviously, we including be some to an get We take up there's speed.

-- and into resolution. we think for was took number rationale that factoring in I of just funnel, then a baking environment right So guide we we're and will the environment that not seeing have the and in, given large kind the take of there. we that And the approach orders what bring the it time those expect with not think the that seeing I the to those and multisystem now, we're there, given

upside we're able the during the convert will as that extent to So to those be year, well.

into kind the XXXX. it that's coming approached we how new in So of year

Daniel Arias

Is there something...

Robert Spignesi

Dan, I on. just add can

Daniel Arias

go Sorry, ahead.

Robert Spignesi

want to on. just I Yes, add

Daniel Arias

[indiscernible]

Robert Spignesi

go will How then Dan, does ahead, and I You second. sound? go that

Daniel Arias

that this Okay, expect to sure? here Lonza there year? collaboration go I go. systems to some number of Are through you you this Are

Robert Spignesi

speak more broadly. to point I was I'll make, going the Dan. So is This

repeating. or So it that it's an note important feature bears

And So there include our our for we our are are Sean contribution excited not multisystem does in guide meaningful new the have any with we as quite more include MilliporeSigma, funnel orders mentioned, nor about. 'XX, that does collaboration that it multiple. from

in with regard prudent a can reason have in why the our again, be to and close we and they're moving, while ship. pin not more and little you global more complex also exciting, be haven't That's we time multisite, tough can to those, can a imagine, concluded included those. to consistent is, as nature, -- timing. bit multi-region, typically they they with And are consuming approach why may These put a And multi-stakeholder. they

mentioned on said, we'll orders. year as as direct That unfolds. all remarks, everyone in relationship I updated against here we the well reserve being large in And the as of upside the our multisystem the 'XX right for as both some selling MilliporeSigma keep these

Operator

line comes with question the of next Paul Your KeyBanc. from Knight

Paul Knight

Or is the into are the collaboration, a going Merck you same people in region? in same on biopharma it How they building? Rob, do sell particular biopharma? prevent and to Millipore

Merck you pickup maybe other gross you supply? in do then margin margin is, a And from Do involved XXXX think goal with the in what KGaA for does have maybe involved? them that even getting

Robert Spignesi

for thanks question. the Paul,

we're So cosmetics, which we the et but first that not growth With and going respective comp one, manufacturing, to our to personal pharmaceutical adjacency segment, effectively. approach models. will pharmaceutical comfortable with our care, it how currently into a basically consider selling to be diligently been working with in. sales and not have goes our channel we broadly only Yes, manage go-to-market biologics, team they more core respect the are cetera, of we're and market

as which and a the is the touched strategy, which priorities With the relationship we regard improvement, also, accelerate on. MilliporeSigma portfolio. in MilliporeSigma margin touched not on sales, anticipate. as But standpoint, of behind core components, their we margin, to material here, I again, consumables goal yes, through lot of catalyze system mentioned, the Gross our accelerating cost only a I to volume, from in has our especially notably of come will

supply So efficiencies our there's factors opportunities regard chain of there improve to input. with definitely to

opportunities. logistics course, of shipping meaningful then, there's and also, downstream And through

here So anticipate improvement is we feature that it margin would relationship. part in and the prominently strategy would of core our

Sean Wirtjes

of Paul, Yes. we substance procure them actually from anything today. And don't

provide. at that pretty consumables, And those, kind in up we have as our what terms a a you of into clean relatively mentioned, can go and of it's So we Rob the match materials what look go good particularly slate with after. to they use major

Paul Knight

Right. Right.

to pretty your Lonza Is regarding you're like Are to essential of And system. pickup then kind industry seems say? recently seeing, Lonza. you And, a, b, that fair at they've from on the encouraging obviously, it the Okay. adopt? Lonza been vocal relationship,

Robert Spignesi

Yes.

So essential I'll on to are. in reverse order, [indiscernible] we let how Lonza

you we our to you But Our infrastructure the for customer know, is build very, is -- opinion is as a our goal, frankly, very a deploy, very, as it. customers pharmaceutical we global job seeking if and benefits a a data the -- are. really forehand, our looks hear this. not the Clearly, paper quality white Lonza how to as like include like manufacturing it of us globally. control technology when of every this are how does it's these a interconnectivity as the example great systems. with is Lonza it's example as good is new how to lot And customers playing far will, But to you deployments. fundamental This in

And we will deployments future Lonza and we that the and with do to quarters through future sites coming continue years. anticipate grow and

Operator

question Brendan Smith from final comes line the of Cowen. TD Your with

Brendan Smith

many if progress all kind and just integration with systems on given deal. Millipore wanted the years? of work? And actually, that thoughts updated X strategy first any to on see. to then just given again, the able automation to quarter the Lonza, have the these committed potential of purchase over you front, you're It's to any evolving QC wondering or Great the on us in ask actually possibilities with AI great how kind first work automation I'm all tell good if I just actually

Robert Spignesi

It's Brendan. Thanks, Rob.

regard as actual the in commercial will think be up followed we commitment it to regard inside So data exist large amount large the as our least and remarks, for With view, we're beginning on approach the Sean digital with comment in well, I operate it creating didn't of these more a mentioned for XXXX. can't -- agreement. before. We can't that significant it. -- quantify we companies, where yes, But for we I and Lonza data, to to broadly, the at

global way to of pull potentially that enhanced into is MilliporeSigma, environment our insights So collaborative strategy. innovation in an intersect now cloud we could And the how manage AI customers. how data, we this services and part opportunity with a for can it our or provide

our be industry would the us Let's and not it's broadly. for but something on radar just very say, more only exciting

and you Okay, up joining look soon. for this forward Have to to a we with wrap weekend. our speaking Thank call many us great of we're today, going morning. you

Operator

gentlemen, joining. Thank concludes and that Ladies for you today's call.

You may now disconnect.

Rapid Micro Biosystems (RPID) 28 Feb 252024 Q4 Earnings call transcript