Rapid Micro Biosystems Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Rapid Micro Biosystems (NASDAQ: RPID) reported strong Q2 2024 results, with record revenue of $6.6 million, up 32% year-over-year. The company placed its 150th Growth Direct® system and first Growth Direct Rapid Sterility system with top global pharma customers. Gross margin improved by 35 percentage points compared to Q2 2023. RPID announced an operational efficiency program expected to achieve positive cash flow without additional financing. The company reaffirmed its 2024 revenue guidance of at least $27.0 million, representing 20%+ growth. Q2 highlights include:

• Product revenue up 43.2% to $4.5 million
• Service revenue up 13.5% to $2.1 million
• Recurring revenue up 7.0% to $3.8 million
• Net loss reduced to $12.6 million ($0.29 per share)
• Cash position of $70 million with no debt

Positive

• Record Q2 2024 revenue of $6.6 million, up 32% year-over-year
• Placed 150th Growth Direct® system with top 15 global pharma customer
• First Growth Direct Rapid Sterility system placed with top 10 global pharma customer
• Gross margin improved by 35 percentage points compared to Q2 2023
• Product revenue increased by 43.2% to $4.5 million
• Reaffirmed full year 2024 revenue guidance of at least $27.0 million (20%+ growth)
• Strong cash position of $70 million with no debt

Negative

• Net loss of $12.6 million in Q2 2024, despite improvement from $14.0 million in Q2 2023
• Implementing workforce reduction and cost-cutting measures
• Positive cash flow not expected until end of 2027

Insights

Financial Analyst

Rapid Micro Biosystems' Q2 2024 results show promising growth and operational improvements, but challenges remain. The 32% year-over-year revenue increase to $6.6 million is impressive, driven by a 43.2% jump in product revenue. The company placed five new Growth Direct® systems and validated five others, signaling strong market traction.

However, the company is still operating at a loss, albeit reduced. The net loss of $12.6 million is an improvement from $14.0 million in Q2 2023, but it's still substantial relative to revenue. The gross margin improvement of 35 percentage points year-over-year is significant, suggesting better operational efficiency.

The announced operational efficiency program, aiming to save $7 million annually, is a prudent move. It's encouraging that the company expects to achieve positive cash flow by 2027 without additional financing. However, investors should note that this timeline is relatively distant.

With $70 million in cash and no debt, the company has a solid financial position to execute its strategy. The reaffirmed 2024 revenue guidance of at least $27.0 million (20% growth) shows confidence in continued expansion.

Overall, while Rapid Micro Biosystems is showing positive momentum, it's important for investors to monitor the path to profitability and the execution of the efficiency program in the coming quarters.

Market Research Analyst

Rapid Micro Biosystems' Q2 results reveal interesting market dynamics in the life sciences technology sector. The placement of the 150th Growth Direct® system with a top 15 global pharma customer indicates strong market penetration and customer loyalty among industry leaders. This milestone, coupled with the first placement of the Growth Direct Rapid Sterility system with a top 10 global pharma customer, suggests a growing acceptance of the company's innovative solutions in critical quality control processes.

The 32.3% year-over-year revenue growth outpaces the general life sciences tools market, implying Rapid Micro Biosystems is gaining market share. The 7.0% increase in recurring revenue to $3.8 million is particularly noteworthy, as it indicates a growing installed base and potential for long-term stable income.

However, the market should consider the broader context. While the company is growing, it's doing so from a relatively small base. The projected $27.0 million in 2024 revenue is modest compared to larger players in the life sciences tools sector. The company's focus on operational efficiency and path to positive cash flow by 2027 suggests a long-term strategy to establish itself as a sustainable player in a niche market.

Investors and industry watchers should monitor how Rapid Micro Biosystems navigates the balance between growth and efficiency, especially in light of potential budget constraints among pharmaceutical customers in the current economic climate.

• Record second quarter 2024 revenue of $6.6 million, representing growth of 32% compared to the second quarter of 2023
• 150th Growth Direct^® system placed with an existing top 15 global pharma customer
• First Growth Direct Rapid Sterility system placed with an existing top 10 global pharma customer
• Gross margin improved by 35 percentage points compared to the second quarter of 2023, and by 24 percentage points compared to the first quarter of 2024
• Announces operational efficiency program that is expected to enable the Company to achieve positive cash flow without additional financing
• Reaffirms full year 2024 total revenue guidance of at least $27.0 million, representing growth of at least 20% compared to full year 2023

LEXINGTON, Mass., Aug. 02, 2024 (GLOBE NEWSWIRE) -- Rapid Micro Biosystems, Inc. (Nasdaq: RPID) (the “Company”), an innovative life sciences technology company providing mission critical automation solutions to facilitate the efficient manufacturing and fast, safe release of healthcare products, today announced its financial results for the second quarter ended June 30, 2024.

"Through the first half of 2024, we have been executing well and advancing our strategic priorities of accelerating Growth Direct^® system placements, meaningfully improving gross margins and commercializing Growth Direct Rapid Sterility,” said Robert Spignesi, President and CEO. “This morning, we announced an operational efficiency program that is expected to enable the Company to achieve positive cash flow without additional financing. We believe the combination of our demonstrated consistent business performance, coupled with disciplined cash management, will allow us to drive substantial shareholder value.”

Second Quarter Financial Results

Total revenue for the second quarter of 2024 increased 32.3% to $6.6 million compared to $5.0 million in the second quarter of 2023. The Company placed five new Growth Direct^® systems and completed the validation of five customer systems compared to two placements and three validations in the second quarter of 2023. Product revenue increased by 43.2% to $4.5 million, compared to $3.2 million in the second quarter of 2023. Service revenue increased by 13.5% to $2.1 million, compared to $1.8 million in the second quarter of 2023. Recurring revenue increased by 7.0% to $3.8 million, compared to $3.6 million in the second quarter of 2023.

Total cost of revenue was $6.8 million in the second quarter of 2024, compared to $6.9 million in the second quarter of 2023.

Total operating expenses were $13.2 million in the second quarter of 2024, essentially flat compared to the prior year. General and administrative expenses decreased by 13.5% compared to the second quarter of 2023. Research and development and sales and marketing expenses increased by 15.8% and 13.3%, respectively, in the second quarter of 2024 compared to the second quarter of 2023.

Net loss for the second quarter of 2024 was $12.6 million, compared to $14.0 million in the second quarter of 2023. Net loss per share for the second quarter of 2024 was $0.29, compared to $0.33 in the second quarter of 2023.

Cash, cash equivalents and investments were approximately $70 million, and the Company had no debt outstanding as of June 30, 2024.

Operational Efficiency Program

In July 2024, the Company completed an enterprise-wide review of opportunities to realize operational efficiencies. Based on the results of this review, the Company is implementing certain cost actions including a reduction in the Company’s current workforce, the closure of open and planned positions, and reductions in other non-headcount-related expenses across the business. These actions are expected to result in approximately $7 million in annual cash savings and enable the Company to achieve positive cash flow by the end of 2027 without additional financing.

The Company does not expect these actions to impact its 2024 revenue or gross margin outlook and plans to continue to invest in key initiatives that are expected to drive future revenue growth and gross margin improvement, including product development and cost reduction programs.

The Company expects to record a related charge of approximately $0.7 million in the third quarter of 2024.

2024 Outlook

The Company is reaffirming its full year 2024 total revenue guidance of at least $27.0 million, representing growth of at least 20% compared to full year 2023, and the placement of at least 20 systems. The Company continues to expect gross margin to be positive for the third and fourth quarters of 2024.

Webcast Details

The Company will host a conference call before the market opens today, August 2, 2024, at 8:30 a.m. ET to discuss its second quarter 2024 financial results. The live call is accessible on the Company’s website at investors.rapidmicrobio.com and will be archived and available for replay for one year.

About Rapid Micro Biosystems

Rapid Micro Biosystems is an innovative life sciences technology company providing mission critical automation solutions to facilitate the efficient manufacturing and fast, safe release of healthcare products such as biologics, vaccines, cell and gene therapies, and sterile injectables. The Company’s flagship Growth Direct system automates and modernizes the antiquated, manual microbial quality control (“MQC”) testing workflows used in the largest and most complex pharmaceutical manufacturing operations across the globe. The Growth Direct system brings the quality control lab to the manufacturing floor, unlocking the power of MQC automation to deliver the faster results, greater accuracy, increased operational efficiency, better compliance with data integrity regulations, and quicker decision making that customers rely on to ensure safe and consistent supply of important healthcare products. The Company is headquartered Lexington, Massachusetts and has U.S. manufacturing in Lowell, Massachusetts, with global locations in Switzerland, Germany, and the Netherlands. For more information, please visit www.rapidmicrobio.com or follow the Company on X (formerly known as Twitter) at @rapidmicrobio or on LinkedIn.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the Company’s guidance for full year 2024 revenue; the Company's operational efficiency program, including the expected costs, timing, savings and other intended benefits thereof; the Company's expectations for achieving positive cash flow by the end of 2027 without additional financing; the Company's financial position and cash runway; the Company's ability to drive substantial shareholder value; expected placements of Growth Direct systems, the anticipated timing of such placements and the impact on the Company’s revenue; and intentions regarding the Company’s commercial execution and improvements to gross margins.

In some cases, you can identify forward-looking statements by terminology such as “outlook,” “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements involve known and unknown risks, uncertainties and assumptions which may cause actual results to differ materially from any results expressed or implied by any forward-looking statement, including, but not limited to, the Company’s ability to implement and realize the intended benefits of its operational efficiency program; the Company's ability to achieve positive cash flow without requiring additional financing; the impact of the operational efficiency program on the Company's ability to achieve its business objectives; the Company's significant losses since inception; the Company’s ability to meet its publicly announced guidance and other expectations about its business and operations; the Company’s limited experience in marketing and sales and the effectiveness of its sales processes; the Company’s need to develop new products and adapt to technological changes; the Company’s ability to establish and maintain its position as a leading provider of automated microbial quality control testing; the Company’s ability to maintain its manufacturing facility; the Company's ability to improve the gross margins of its products and services; risks related to third-parties; the Company’s ability to retain key management and other employees; risks related to regulatory and intellectual property matters; risks related to supply chain disruptions and the impact of inflation; the impact of macroeconomic volatility; and the other important factors outlined under the caption “Risk Factors” in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in its other filings with the SEC, which are available on the SEC's website at www.sec.gov and the Investor Relations page of its website at investors.rapidmicrobio.com. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it cannot guarantee future results. The Company has no obligation, and does not undertake any obligation, to update or revise any forward-looking statement made in this press release to reflect changes since the date of this press release, except as may be required by law.

RAPID MICRO BIOSYSTEMS, INC. Unaudited Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue:
Product revenue	$	4,537			$	3,169			$	8,250			$	6,493
Service revenue		2,081				1,833				3,979				3,544
Total revenue		6,618				5,002				12,229				10,037
Costs and operating expenses:
Cost of product revenue		4,917				4,689				10,090				9,670
Cost of service revenue		1,890				2,205				3,851				4,049
Research and development		3,744				3,233				7,586				6,386
Sales and marketing		3,627				3,201				6,908				6,663
General and administrative		5,818				6,728				11,445				13,195
Total costs and operating expenses		19,996				20,056				39,880				39,963
Loss from operations		(13,378	)			(15,054	)			(27,651	)			(29,926	)
Other income (expense):
Interest income, net		838				1,073				1,821				2,076
Other expense, net		(23	)			(29	)			(52	)			(40	)
Total other income, net		815				1,044				1,769				2,036
Loss before income taxes		(12,563	)			(14,010	)			(25,882	)			(27,890	)
Income tax expense		15				6				18				13
Net loss	$	(12,578	)		$	(14,016	)			(25,900	)			(27,903	)
Net loss per share — basic and diluted	$	(0.29	)		$	(0.33	)		$	(0.60	)		$	(0.65	)
Weighted average common shares outstanding — basic and diluted		43,616,501				43,059,937				43,431,170				42,936,941

RAPID MICRO BIOSYSTEMS, INC. Unaudited Condensed Consolidated Balance Sheets (in thousands)
	June 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	37,121		$	24,285
Short-term investments		32,269			67,768
Accounts receivable		5,011			5,532
Inventory		21,429			19,961
Prepaid expenses and other current assets		2,367			2,869
Total current assets		98,197			120,415
Property and equipment, net		12,273			12,832
Right-of-use assets, net		5,733			6,240
Long-term investments		—			2,911
Other long-term assets		598			770
Restricted cash		284			284
Total assets	$	117,085		$	143,452
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,180		$	1,973
Accrued expenses and other current liabilities		7,819			9,907
Deferred revenue		5,427			5,974
Lease liabilities, short-term		1,173			1,132
Total current liabilities		16,599			18,986
Lease liabilities, long-term		5,616			6,214
Other long-term liabilities		281			263
Total liabilities		22,496			25,463
Total stockholders’ equity		94,589			117,989
Total liabilities and stockholders’ equity	$	117,085		$	143,452

RAPID MICRO BIOSYSTEMS, INC. Unaudited Cash, Cash Equivalents and Investments (in thousands)
	June 30, 2024			December 31, 2023
Cash and cash equivalents	$	37,121		$	24,285
Short-term investments		32,269			67,768
Long-term investments		—			2,911
Cash, cash equivalents and investments	$	69,390		$	94,964

FAQ

What was Rapid Micro Biosystems' (RPID) revenue for Q2 2024?

Rapid Micro Biosystems reported record Q2 2024 revenue of $6.6 million, representing a 32% increase compared to Q2 2023.

How many Growth Direct® systems did RPID place in Q2 2024?

RPID placed five new Growth Direct® systems in Q2 2024, including its 150th system with an existing top 15 global pharma customer.

What is RPID's full-year 2024 revenue guidance?

RPID reaffirmed its full-year 2024 total revenue guidance of at least $27.0 million, representing growth of at least 20% compared to full year 2023.

How did RPID's gross margin improve in Q2 2024?

RPID's gross margin improved by 35 percentage points compared to Q2 2023, and by 24 percentage points compared to Q1 2024.

What operational efficiency program did RPID announce in Q2 2024?

RPID announced a program expected to result in $7 million annual cash savings, enabling positive cash flow by end of 2027 without additional financing. It includes workforce reduction and cost-cutting measures.