Rapid Micro Biosystems, Inc. Class A Common Stock 2026 Q2 Earnings Call

Thank you for joining the Rapid Micro Biosystems second quarter earnings call. Joining me on the call are Rob Spignesi, President and Chief Executive Officer, and Sean Wirtjes, Chief Financial Officer. This morning, we issued a press release announcing our second quarter results. 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.

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 margin, system placements, and validation activities, expectations for and planned 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.

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 achieve the milestones necessary to access any future tranches under our existing debt facility and to comply with all of its obligations thereunder, our ability to access additional capital such as through the exercise of our recently issued warrants, our ability to deliver products to customers and recognize revenue, and market and macroeconomic conditions.

For a more detailed list and description of the risks and uncertainties associated with Rapid Micro's 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 subsequent filings with the SEC. 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. 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, August 7th, 2026. 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. With that, I'll turn the call over to Rob.

Thank you, Mike. Good morning, everyone. I'll begin my discussion this morning with a review of our second quarter performance and highlights. I will then discuss our execution against our 2026 full-year objectives and share some takeaways from my interactions with customers across North America, Europe, and Asia.

I will then turn the call over to Sean, who will provide a more detailed review of our second quarter results and second half outlook.

Today, we report a second quarter total revenue of $8.1 million, representing 11% year-over-year growth and exceeding the guidance we provided in May. During the quarter, we placed four Growth Direct Systems and completed nine system validations. I'm also pleased to announce that we achieved a significant milestone during the quarter with the placement of our 200th Growth Direct System. Product revenue increased 10%, driven by more than 20% growth in consumables. Recurring revenue increased 14%, reflecting continued expansion of both our installed base and strong system utilization. Consumable revenue and units reached new quarterly records.

In the third quarter, we expect to ship our 10 millionth consumable, another significant milestone that highlights the growing adoption and routine use of the Growth Direct Platform across our customer base. Service revenue increased 13%, driven by higher validation activity year-over-year. We ended the quarter with 169 fully validated systems globally and have a strong validation pipeline entering the second half of the year. This growing validation pipeline provides increasing visibility into future consumable revenue growth and further strengthens the recurring revenue profile of the business. Based on this momentum and our outlook, we are increasing our full-year validation guidance to at least 27 systems. Turning to margins, we delivered a record 15% gross margin in the second quarter, reflecting strong execution against our margin expansion strategy Our first half performance reinforces our confidence in achieving our full-year margin targets.

We currently anticipate fourth quarter gross margin in the mid to high 20% range. Turning to our commercial activities and customer engagement. In June, Amgen hosted our first North America Growth Direct Day, bringing together a strong mix of existing users and prospective customers. As with our prior events, the program featured high-value peer-to-peer discussions focused on the operational, financial, and regulatory benefits of automating and standardizing microbial QC. A key theme was how leading biopharma companies approach global Growth Direct deployments, from internal decision-making and cross-functional alignment to implementation, validation, and successful operation across multiple sites and geographies. We are grateful to Amgen for hosting the event and sharing their experience as a leading global biopharmaceutical company, including their approach to deploying the Growth Direct across their global manufacturing network.

This marked the second of three regional Growth Direct Day events planned for 2026. We will conclude this year's series in October with a European event hosted by Merck MilliporeSigma at its innovation center in Darmstadt, Germany. By making these events regionally accessible, we are enabling a broader group of prospective customers to engage directly with experienced Growth Direct users. In biopharma, peer-to-peer validation remains one of the most effective ways to build confidence, accelerate adoption, and advance purchasing decisions. Collectively, these events continue to strengthen both our direct commercial pipeline and the opportunities generated through our collaboration with MilliporeSigma. Following Growth Direct Day, I spent time meeting with customers across North America, Europe, and Asia. I remain highly encouraged by the value proposition of the Growth Direct platform and how it addresses customers' needs. What stands out is how these conversations and emerging industry trends continue to evolve.

Customers are spending more time discussing how to integrate the Growth Direct platform into broader automation, digital, and data enablement strategies and workflows across our manufacturing and quality operations. A consistent message is emerging from these discussions. Manufacturers that can improve speed, consistency, accuracy, data integrity, and productivity will create meaningful competitive advantages. Full workflow automation is at the core of these strategies. In some cases, the Growth Direct is viewed as a critical enabling technology to activate these transformations. Accordingly, we're increasingly seeing customers focus on broader deployment strategies and more integrated and automated quality and manufacturing systems. We also continue to see encouraging activity related to U.S. reshoring and biomanufacturing capacity expansion, which we believe will become an increasingly meaningful contributor to growth beginning in 2027.

Our commercial pipeline continues to expand across all regions, but is especially robust in North America, where strong customer demand and engagement are contributing to the growth of our enterprise deployment and multisystem opportunity funnel. Turning to MilliporeSigma, we remain encouraged by the progress of the partnership. Their commercial organization is active globally. Their opportunity funnel continues to meaningfully expand as they leverage their broader reach and deep customer relationships. In June, the Rapid Micro and MilliporeSigma leadership teams met in Europe to advance several strategic initiatives supporting the collaboration. In addition to progress on our joint commercial activity, discussions included plans to leverage MilliporeSigma's manufacturing, supply chain, and technical expertise to support and accelerate gross margin expansion goals as well as current and future product innovation opportunities.