Q1 2024 Rapid Micro Biosystems Inc Earnings Call

May 3, 2024

Operator: Thank you for standing by. My name is John, and I will be your conference operator for today. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is John and I'll be your conference operator for today all lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mike Beaulieu, head of investor relations. Please go ahead.

After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time keep your press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call over to Mike Bolger had head of Investor Relations. Please go ahead.

Michael Beaulieu: Good morning, and thank you for joining Rapid Micro Biosystems' first quarter 2024 earnings call. 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 first quarter 2024 financial results. A copy of the release is available on the company's website at rapidmicrobio.com under investors in the news and events section.

Michael Beaulieu: Good morning, and thank you for joining the rapid micro Biosystems first quarter 2024 earnings call.

Michael Beaulieu: Joining me on the call are Rob <unk>, President and Chief Executive Officer, and Shaun <unk> Chief Financial Officer earlier today, we issued a press release announcing our first quarter 2024 financial results.

Michael Beaulieu: A copy of the release is available on the company's website at rapid micro bio dot com under investors and the news and events section.

Michael Beaulieu: 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 conditions, Anticipated future cash usage and cash runway, guidance for 2024, including revenues, expenses, gross margins, system placements, and validation activities, expectations for and planned activities related to the company's business development and growth.

Speaker Change: Before we begin I'd like to remind you that many statements made during this call maybe 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 1095.

Michael Beaulieu: Customer Interest and Adoption of the Growth REC System, Statements regarding the Planned Launch and Commercialization of Rapid Sterility, and the Potential Impact of Macroeconomic Uncertainty on Rapid Micro's Business. However, actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. For a list and description of these risks and uncertainties associated with Rapid Micro's business, please refer to the risk factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as updated from time to time in our subsequent filings with the SEC.

Speaker Change: 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.

Speaker Change: Anticipated future cash usage and cash runway guidance for 2024, including revenues expenses gross margin system placements and validation activities.

Speaker Change: Expectations for and planned activities related to the company's business development and growth.

Speaker Change: Customer interest and adoption of the growth direct system statements regarding the planned launch and commercialization of rapid sterility and the potential impact of macroeconomic uncertainty on rapid micros business.

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

Speaker Change: For a list and description of these risks and uncertainties associated with rapid micros business. Please refer to the risk factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission as updated from time to time in our subsequent filings with the SEC.

Michael Beaulieu: 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. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 3rd, 2024. 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.

Speaker Change: 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.

Speaker Change: This conference call contains time sensitive information and is accurate only as of the live broadcast today may three 2024.

Speaker Change: 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.

Speaker Change: And with that I'll now turn the call over to Rob.

Robert G. Spignesi: Thank you, Mike. Good morning, everyone, and thank you for joining us.

Thank you Mike Good morning, everyone and thank you for joining us I will begin this morning's call with an overview of our first quarter performance and highlights followed by a review of our priorities for 2024.

Robert G. Spignesi: I will begin this morning's call with an overview of our first quarter performance and highlights, followed by a review of our priorities for 2024. I will then turn the call over to Sean for a more detailed review of our financial results and outlook. First quarter total revenue increased 11% to $5.6 million compared to the first quarter of 2023. This performance is ahead of the guidance we provided in March and represents the sixth consecutive quarter that our revenue exceeded guidance.

Rob: I will then turn the call over to Sean for a more detailed review of our financial results and outlook.

Sean: First quarter total revenue increased 11% to $5 $6 million.

Sean: Compared to the first quarter of 2023.

Sean: This performance is ahead of the guidance, we provided in March and represents the sixth quarter in a row that our revenue exceeded guidance.

Robert G. Spignesi: We place three growth-directed systems in a quarter, all to existing customers. First quarter recurring revenue increased 15% compared to Q1 2023 and has now grown by double digits in each of the 11 quarters since we became a public company. Consumable sales, which are part of recurring revenue, increased 22% year-over-year and achieved a new quarterly record, exceeding our prior record set in the second quarter of 2023.

Sean: We placed three growth direct systems in the quarter also existing customers.

Sean: First quarter recurring revenue increased 15% compared to Q1 2023 and has now grown by double digits in each of the 11 quarters since we became a public company.

Sean: Consumable sales, which are part of recurring revenue increased 22% year over year and achieved a new quarterly record.

Sean: Exceeding our prior record set in the second quarter of 2023.

Robert G. Spignesi: This strength in consumables demonstrates that customers are actively using their GrowthDirect systems and are realizing value across their global manufacturing network. In total, our first quarter results reflect a solid start to 2024, and we are reaffirming our full year 2024 revenue guidance of at least $27 million, representing at least 20% growth and at least 20 system placements. We continue to execute against our strategic priorities of accelerating system placements, improving gross margins, commercializing innovative new products, and prudently managing our cash. I'd like to provide a brief update and context for these priorities.

Sean: This strength in consumables demonstrates that customers are actively using their growth direct systems and are realizing value across our global manufacturing networks.

Sean: In total our first quarter results reflect a solid start to 2024, and we are reaffirming of our full year 2020 for revenue guidance of at least $27 million, representing at least 20% growth and at least 20 system placements.

Sean: We continue to execute against our strategic priorities of accelerating system placements, improving gross margins commercializing innovative new products and prudently managing our cash.

Sean: I'd like to provide a brief update and context for these priorities.

Robert G. Spignesi: Over the past few months, I've visited with customers across North America and Europe. These meetings are always productive, and I would like to provide some recent customer feedback. The growth direct value proposition is resonating, and customers are realizing meaningful benefits. They continue to plan further deployment of growth direct systems across our global manufacturing network. The many benefits of AgroTourette's full automation include enhanced data integrity and Proof Accuracy.

Over the past few months I visited with customers across North America and Europe. These meetings are always productive I would like to provide some recent customer feedback.

Sean: The growth direct value proposition is resonating and customers are realizing meaningful benefits. They continue to play and further deployment of growth direct systems across our global manufacturing networks.

Sean: The many benefits of.

Sean: The growth of Rx for automation include enhanced data integrity improve accuracy reduce human error and lower hands on labor costs.

Robert G. Spignesi: reducing human error and lower hands-on labor costs. In addition, GoThread offers operational efficiencies that can enable faster product release, less waste, and reduced inventory. Moreover, given the clear demand in the industry for increased manufacturing capacity, Growth Direct's speed and efficiency provide critical flexibility to manufacturing and quality control operations and can enable customers to unlock additional production capacity. Importantly, these operational efficiencies, which are ideally suited for the advanced modalities of biologics and cell and gene therapies, are also effective for other segments, such as vaccines, sterile injectables, and small molecule manufacturing. The pace of growth in advanced modalities and the need for improved data integrity industry-wide are accelerating the adoption of automation.

Sean: In addition, the goldstrike offers operational efficiencies, which can enable faster product release less waste and reduce inventories.

Sean: Moreover, given the clear demand in the industry for increased manufacturing capacity.

Sean: The growth of our speed and efficiency provide critical flexibility to manufacturing and quality control operations and can enable customers to unlock additional production capacity.

Sean: Importantly, these operational efficiencies, which are ideally suited for the advanced modalities of biologics and cell and gene therapies are also effective for other segments, such as vaccines sterile injectables and small molecule manufacturing.

Sean: The pace of growth in advanced modalities and the need for improved data integrity industrywide is accelerating the adoption of automation as customers implement automation across our manufacturing networks. We are confident that the growth direct is an important part of the solution.

Sean: We continue to expect an acceleration in system placements in the second half of the year.

Sean: Our confidence is underpinned by the size and quality of our sales funnel a fully staffed global sales team and visibility into growth direct purchases from our customers' senior level executives.

Robert G. Spignesi: Turning to our next priority, which is improving gross margins, we expect to continue to benefit from our initiatives focused on product cost reduction, manufacturing efficiency, and service productivity improvement.

Sean: Turning to our next priority, which is improving gross margins, we expect to continue to benefit from our initiatives focused on product cost reduction manufacturing.

During efficiency and service productivity improvements.

Robert G. Spignesi: We remain on track for an inflection to positive growth margins in the second half of the year. Next, we look forward to the successful launch and commercialization of Rapid Serility. Since our announcement earlier this year, customer interest in this breakthrough technology has been growing and has exceeded our expectations. Our commercial teams are trained, and we are completing the technology transfer from R&D to manufacturing with the associated scale-up activity. In June, we are hosting customers at our Lexington Innovation Center and Demonstration Lab for a live, hands-on experience with the GrowthDirect Rapid Sterility platform.

Sean: We remain on track for an inflection to positive gross margins in the second half of the year.

Sean: Next we look forward to the successful launch and commercialization of rapid sterility.

Sean: Since our announcement earlier this year customer interest for this breakthrough technology has been growing and has exceeded our expectations.

Sean: Our commercial teams are trained and we are completing the technology transfer from R&D and into manufacturing with the associated scale up activities.

Sean: In June we are hosting customers at our elections and innovation center and demonstration lab for a live hands on experience with the growth direct rapid sterility platform.

Robert G. Spignesi: We remain on schedule for a mid-2024 launch and look forward to providing an update on our second quarter earnings call in early August. Turning to cash management, we are focused on reducing our cash burn by carefully controlling operating expenses, capital expenditures, and working capital.

Sean: We remain on schedule for a mid 2024 launch and look forward to providing an update on our second quarter earnings call in early August.

Sean: Turning to cash management, we are focused on reducing our cash burn vitality controlling operating expenses capital expenditures and working capital.

Robert G. Spignesi: So, to summarize our key messages from the first quarter, it was a solid start to 2024, including a record quarter in consumable revenue. The Growth Directive provides a strong value proposition by delivering full automation, operational efficiencies, and improved data integrity. Customers continue to plan further deployment of GrowthDirect systems across their global manufacturing network. Early customer interest in Rapid Sterility is strong, and we are on schedule for a mid-year launch. Wrapping up my prepared remarks, I remain excited about our long-term outlook.

So to summarize our key messages from the first quarter. It was a solid start to 2024, including a record quarter in consumable revenue.

Sean: The growth directly providing a strong value proposition by delivering for automation operational efficiencies and an improved data integrity customers continue to plan further deployment of <unk> systems across our global manufacturing networks.

Sean: Early customer interest and rapid sterility is strong and we are on schedule for a mid year launch.

Sean: Wrapping up my prepared remarks, I remain excited about our long term outlook, we have a world class customer base, consisting of 70% of the top 20 global pharma companies.

Robert G. Spignesi: We have a world-class customer base consisting of 70% of the top 20 global pharma companies, a proven technology with a strong value proposition that is embedded in customer work, and an attractive, high-growth business model with durable recurring revenue. We are focused on our path to profitability and expect our cost, efficiency, and productivity initiatives to lead to positive gross margins in the second half of 2024 with continued improvement thereafter. And with that, I'll now turn the call over to Sean to discuss our first quarter performance and our outlook in more detail.

Sean: A proven technology with a strong value proposition that is embedded in customer workflows in attractive high growth business model with durable recurring revenue and.

Sean: And we are focused on our path to profitability and expect our cost efficiency and productivity initiatives to lead to positive gross margins in the second half of 2024 with continued improvement thereafter.

Sean: And with that I'll now turn the call over to Sean to discuss our first quarter performance and our outlook in more detail John.

Sean: Thanks, Rob and good morning, everyone.

Sean Wirtjes: Thanks, Rob, and good morning, everyone. I'll start my comments today with a review of our first quarter results and then discuss our second quarter and full year 2024 outlook. Q1 revenue increased 11% to $5.6 million compared to $5 million in Q1 2023. During the first quarter, we placed three growth threats, compared to three in the first quarter last year.

Sean: I'll start my comments today with a review of our first quarter results and then discuss our second quarter and full year 2020 for outlook.

Sean: Q1 revenue increased 11% to $5 6 million compared to $5 million in Q1 2023 <unk>.

Sean: During the first quarter, we placed three growth for X systems compared to three in the first quarter last year. We also completed three validation in the quarter compared to two in the first quarter last year.

Sean Wirtjes: We also completed three validations in the quarter compared to two in the first quarter last year. Product revenue, which is comprised of systems and consumables, increased 12% to $3.7 million in the quarter, compared to $3.3 million in Q1 last year. The growth in product revenue was primarily driven by a record quarter on consumables as a result of continued growth in validated systems, as well as several shipments made during Q1 that were originally expected in Q2.

Sean: Product revenue, which is comprised of systems and consumables increased 12% to $3 7 million in the quarter compared to $3 3 million in Q1 last year.

Sean: The growth in product revenue was primarily driven by a record quarter on consumables as a result of continued growth and validated systems as well as several shipments made during Q1 that were originally expected in Q2.

Sean Wirtjes: Service revenue increased 11% to $1.9 million in the first quarter, compared to $1.7 million in Q1 last year. Service revenue growth was impacted in Q1 by some planned validation revenue that shifted into early Q2. The increase compared to the prior year quarter was primarily driven by a higher level of validation activity, as well as higher revenue from service contracts due to the increase in the number of validated growth direct systems.

Sean: Service revenue increased 11% to $1 9 million in the first quarter compared to $1 7 million in Q1 last year.

Service revenue growth was impacted in Q1 by some planned validation revenue that shifted into early Q2.

Sean: The increase compared to the prior year quarter was primarily driven by a higher level of validation activity as well as higher revenue from service contracts due to the increase in the number of validated growth direct system first quarter recurring revenue, which consists of consumables and annual service contracts increased 15% to $3 7 million compared to $3.

Sean Wirtjes: First quarter recurring revenue, which consists of consumables and annual service contracts, increased 15% to $3.7 million, compared to $3.3 million in Q1 last year. Non-recurring revenue, which is comprised mainly of systems and validation revenue, was $1.9 million in Q1, compared to $1.8 million in the prior year quarter. Turning to gross margins, product margins were negative $1.5 million in Q1 compared to negative $1.7 million in the first quarter last year. As we expected and is typical for our business, Q1 product margins stepped down from Q4 2023, mainly due to lower system placements and revenue.

Sean: $3 million in Q1 last year.

Sean: Nonrecurring revenue, which is comprised mainly of systems and validation revenue was $1 9 million in Q1 compared to $1 8 million in the prior year quarter.

Sean: Turning to gross margins product margins were negative $1 5 million in Q1 compared to negative $1 $7 million in the first quarter last year.

Sean: As we expected and is typical for our business Q1 product margin step down from Q4, 2023, mainly due to lower system placements and revenue.

Sean Wirtjes: Compared to Q1 last year, the improvement was attributable to continued benefits from actions we've taken to lower product costs and increase manufacturing efficiency. However, these benefits were partially offset by some customer site readiness delays, which shifted $0.2 million in high-margin LIMS software revenue from Q1 into Q2, and an Unfavorable Product Mix due to the higher proportion of consumable revenue in Q1 this year.

Sean: Impaired to Q1 last year. The improvement was attributable to continued benefits from actions, we've taken to lower product costs and increased manufacturing efficiency.

Sean: These benefits were partially offset by some customer site readiness delays.

Sean: Which shifted zero point $2 million in high margin limb software revenue from Q1 into Q2 and.

Sean: An unfavorable product mix due to the higher proportion of consumable revenue in Q1 this year.

Sean Wirtjes: Service margins were slightly negative in the first quarter, largely due to non-recurring expenses. This compares to negative $0.1 million in the first quarter last year. On a combined basis, our first quarter gross margin was negative $1.5 million, or negative 27%, compared to negative $1.8 million, or negative 36%, in Q1 last year. We continue to expect our Q1 gross margins to be the lowest of the year.

Sean: Service margins were slightly negative in the first quarter largely due to nonrecurring expenses.

Sean: This compares to negative <unk> $1 million in the first quarter last year.

Sean: On a combined basis, our first quarter gross margin was negative $1 5 million or negative, 27% compared to negative $1 8 million or negative <unk>, 36% in Q1 last year.

Sean: We continue to expect our Q1 gross margins to be the lowest of the year. We then expect meaningful improvement as we work our way through the remaining quarters as volumes and revenue increase and we continue to make progress on our initiatives focused on product cost reduction and manufacturing efficiency as well as service productivity.

Sean Wirtjes: We then expect meaningful improvement as we work our way through the remaining quarters as volumes and revenue increase, and we continue to make progress on our initiatives focused on product cost reduction and manufacturing efficiency as well as service productivity. Continuing down the P&L, total operating expenses were $12.8 million in the first quarter compared to $13.1 million in the prior year quarter, a reduction of approximately 3% versus the prior year period. R&D expenses were $3.8 million in Q1, an increase of 22% versus the prior year period, largely due to activities associated with the upcoming launch of Rapid Sterility.

Sean: Continuing down the P&L total operating expenses were $12 8 million in the first quarter compared to $13 1 million in the prior year quarter, a reduction of approximately 3% versus the prior year period.

Sean: R&D expenses were $3 8 million in Q1, an increase of 22% versus the prior year period, largely due to activities associated with the upcoming launch of rapid sterility.

Sean Wirtjes: Sales and marketing expenses were $3.3 million, and G&A expenses were $5.6 million in the first quarter, representing a combined 10% reduction versus the prior year quarter as we tightly control spending in the business. The net loss was $13.3 million in Q1. This compares to a net loss of $13.9 million in Q1 last year. Net loss per share was $0.31 in Q1 compared to a net loss per share of $0.32 in the prior year quarter, with respect to non-cash expenses and capital expenditures. Depreciation and amortization expenses were $0.8 million, stock compensation expense was $1.1 million, and capital expenditures were $0.6 million in the first quarter.

Sean: Sales and marketing expenses were $3 3 million and G&A expenses were $5 6 million in the first quarter, representing a combined 10% reduction versus the prior year quarter as we tightly control spending in the business.

Sean: Net loss was $13 3 million in Q1. This compares to a net loss of $13 9 million in Q1 last year.

Sean: Net loss per share was <unk> 31 in Q1 compared to net loss per share of <unk> 32 in the prior year quarter.

Sean: With respect to noncash expenses and capital expenditures.

Sean: Depreciation and amortization expenses were zero point $8 million.

Sean: Stock compensation expense was $1 1 million and capital expenditures were <unk> 6 million in the first quarter.

Sean Wirtjes: We ended the first quarter with approximately $80 million of cash and investments on our balance sheet. I'll now turn to our Q2 and full year 2024 outlook. We continue to expect total revenue of at least $27 million for the full year 2024, which assumes that we will place at least 20 systems. This implies year-over-year revenue growth of at least 20%. This guidance continues to reflect some uncertainty related to the timing and scale of customer purchase decisions.

Sean: We ended the first quarter with approximately $80 million of cash and investments on our balance sheet.

Speaker Change: I'll now turn to our Q2 and full year 2020 for outlook.

Speaker Change: We continue to expect total revenue of at least $27 million for the full year 2024, which assumes that we will replace at least 20 systems.

Speaker Change: This implies year over year revenue growth of at least 20%.

Speaker Change: This guidance continues to reflect some uncertainty related to the timing and scale of customer purchase decisions.

Sean Wirtjes: For the second quarter, we expect total revenue of at least $6 million, which assumes at least four system placements. We then expect revenue and placements to increase sequentially in Q3 and peak in Q4, consistent with our typical annual cadence and the guidance we provided in March. Looking at consumables, we expect revenue to decrease sequentially in Q2 compared to Q1 due primarily to the timing of customer orders and shipments. We then expect consumable revenue to increase sequentially in Q3 and then again in Q4 as more new systems complete validation and enter routine use.

Speaker Change: For the second quarter, we expect total revenue of at least $6 million, which assumes at least for system placements.

Speaker Change: We then expect revenue and placements to increase sequentially in Q3 and peak in Q4, consistent with our typical annual cadence in the guidance we provided in March.

Speaker Change: Looking at consumables, we expect revenue to decrease sequentially in Q2 compared to Q1, due primarily to the timing of customer orders and shipments. We then expect consumable revenue to increase sequentially in Q3, and then again in Q4 as more new systems complete validation and enter routine use.

Sean Wirtjes: With respect to service, we expect revenue to be between $2 million and $2.5 million each quarter over the balance of the year, with variability within this range primarily driven by the timing of validation activity. We are reaffirming our guidance of at least 16 validations in 2024, including at least four in the second quarter.

Speaker Change: With respect to service, we expect revenues to be between $2 million and $2 5 million each quarter over the balance of the year with variability within this range, primarily driven by the timing of validation activities.

Speaker Change: We are reaffirming our guidance of at least 16 validation in 2024, including at least four in the second quarter.

Sean Wirtjes: Turning to gross margins, we expect meaningful sequential improvement in the second quarter compared to the first quarter, but we still expect Q2 margins to be negative. Thereafter, we continue to expect positive gross margins in both Q3 and Q4, as well as for the full year. We expect product margins to improve each quarter based on ongoing cost reduction and manufacturing efficiency initiatives, as well as increasing volume, but remain negative. We expect double-digit positive service margins in each of the remaining three quarters of the year based on higher revenue and improved productivity.

Speaker Change: Turning to gross margins.

Speaker Change: We expect meaningful sequential improvement in the second quarter compared to the first quarter, but we still expect Q2 margins to be negative.

Speaker Change: Thereafter, we continue to expect positive gross margins in both Q3 and Q4 as well as for the full year.

Speaker Change: We expect product margins to improve each quarter based on ongoing cost reduction and manufacturing efficiency initiatives as well as increasing volume but remain negative.

Speaker Change: We expect double digit positive service margins in each of the remaining three quarters of the year based on higher revenue and improved productivity.

Sean Wirtjes: Looking forward, we remain confident in our ability to meaningfully improve our gross margins in 2024 and beyond as we continue to grow revenue, reduce product costs, drive higher manufacturing efficiency, control manufacturing overhead costs, and increase service productivity. We continue to expect operating expenses to be in a range of $48 million to $52 million in 2024, with depreciation and amortization expense of approximately $3 million, stock compensation expense of approximately $5 million, capital expenditures of approximately $3 million, and other income, which is comprised primarily of interest income of approximately $4 million.

Speaker Change: Looking forward, we remain confident in our ability to meaningfully improve our gross margins in 2024 and beyond as we continue to grow revenue reduce product costs drive higher manufacturing efficiency control manufacturing overhead costs and increased service productivity.

Speaker Change: We continue to expect operating expenses to be in a range of 48 million to $52 million in 2024, with depreciation and amortization expense of approximately $3 million.

Speaker Change: Stock compensation expense of approximately $5 million capex of approximately $3 million and other income which is comprised primarily of interest income of approximately $4 million.

Speaker Change: Finally, we continue to expect cash burn of roughly $40 million for the full year 2024 looking.

Speaker Change: Looking out further our goal is to reduce cash burn meaningfully over each of the next several years as we drive towards profitability through a combination of revenue growth margin improvement and management of our Opex Capex and working capital. This supports our expectation that our existing cash and investments provide us with runway at least into the second half of 2026.

Sean Wirtjes: Finally, we continue to expect cash burn of roughly $40 million for the full year 2024. Looking out further, our goal is to reduce cash burn meaningfully over each of the next several years as we drive towards profitability through a combination of revenue growth, margin improvement, and management of our OPEX, CAPEX, and working capital. This supports our expectation that our existing cash and investments will provide us with runway at least into the second half of 2026. That concludes my comments, so at this point, we'll open the call up for questions. Operator?

Speaker Change: That concludes my comments so at this point, we will open the call up for questions operator.

Operator: At this time, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. We'll pause for just a moment to compile the Q&A roster. The first question comes from the line of Tejas Savan from Morgan Stanley. Please go ahead.

Speaker Change: At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question seem to press Star one again with boss for just a moment to compile the Q&A roster.

Speaker Change: The first question comes from the line of Tejas Savant from Morgan Stanley. Please go ahead.

Yuko Oku: Good morning, this is Yuko on the call for Tejas to take a question. Some of your peers have been seeing worsening budget pressure, leading to further elongation of sales cycles. Could you elaborate on whether you're seeing a similar dynamic and what's your take on the customer sentiment with respect to large CapEx purchases?

Good morning.

Tejas Savant: On the call for JJ.

Tejas Savant: To your question.

Tejas Savant: Okay appears have been seen worsening budget pressure.

Tejas Savant: So further elongation of sales cycles could you elaborate on whether you're seeing a similar dynamic in what's your take on the customer.

Tejas Savant: Okay.

Tejas Savant: With respect to large capex purchases.

Robert G. Spignesi: Hey Yuko, it's Rob. So, uh... Our view and experience with customer budgets is similar to previous quarters. So what we're seeing is, I'd say, continued budget scrutiny with regard to CapEx. Purchases, and ours, at least for the Quality Control Labs, is on the larger end, so it can pick up the second part of your question as well. So, no meaningfully different changes over the past few quarters, but we have seen, I would say, more scrutiny.

Rob: Heiko, it's Rob so.

The our view and experience with customer budgets as is similar to previous quarters. So what we're seeing is.

I would say continued budget scrutiny with regard to capex purchases and ours at least for the quality control labs is on the larger end.

Speaker Change: Pick up the second part of your question as.

Speaker Change: As well so no meaningful lead different changes.

Speaker Change: Over the over the past few quarters, but we have seen obviously more scrutiny theres more cycles with regard to.

Robert G. Spignesi: There are more cycles with regard to approval processes, and it's a bit slower to get to an answer as well. That being said, we're executing through it. Moreover, another important dynamic to understand with Rapid Microbiosystems is that Growth Direct, in many cases, is considered a strategic project and program that impacts multiple sites around a customer's global manufacturing network. So while that doesn't insulate us from these dynamics, we have seen notable cases where our projects for Growth Direct purchases have continued to be prioritized.

Approval processes slower too a bit slower to get to an answer as well that being said, where we're executing we're executing through it a Moreover, another important dynamic to understand.

Speaker Change: With with rapid micro biosystems is the growth direct in many cases is.

Speaker Change: Is considered a strategic project and program that impacts multiple sites around our customers' global manufacturing network. So it doesn't insulate us from these dynamics, we have seen notable cases, where.

Speaker Change: Our our projects for growth direct purchases has continued to be prioritized.

Speaker Change: Got it thank you for that color.

Robert G. Spignesi: And then a separate follow-up question, with Sterility launch expected in the mid-year time frame, could you elaborate on the remaining to-dos before commercial launch? And then also, is this something that you're actively communicating to your customers, or is it something you're holding until the customer event? If you are actively communicating the upcoming launch already, could you give us a sense for the... Yeah, so in reverse order of what we have

Speaker Change: In a separate follow up.

Speaker Change: With the launch expected in the midyear timeframe could you elaborate on the remaining produce before commercial launch.

Speaker Change: Yes.

Speaker Change: I think that youre actively communicating to our customers.

Speaker Change: Holding until the customer event. If you are actively communicating the upcoming launch already could you give us a sense for the customer interest you are seeing.

Robert G. Spignesi: Yeah, so in reverse order, we have been communicating this at a recent trade show, the PDA annual show earlier this year, and the interest is, as we expected, quite strong. It reaffirms our belief and our customer work that the market needs a rapid sterility automated system that has what I would call differentiated features from what's available in the market today. That's faster time to detection, much faster time to results, full automation, and the full complement of value proposition that GrowthDirect provides, walk away, full automation, data integrity.

Speaker Change: Yes, so in reverse order of what we have been we have been communicating to customers we were.

Speaker Change: <unk> communicated this at a recent trade show the PGA and annual show earlier this year and the interest is as we expected quite strong it reaffirms our our belief in our voice of customer work.

Speaker Change: <unk> that the market needs a rapid sterility automated system that has that has what I would call differentiated features from what's available.

Speaker Change: In the market today, that's faster time to detection much faster time to results full automation and the full complement of value proposition that the growth direct provides walkaway full automation data integrity. Those I view. Those features are not available and I'll call on other technology enabled solutions into.

Robert G. Spignesi: In our view, those features are not available in, I'll call it, other technology-enabled solutions in the market today and certainly not in the legacy companion manual method, which is still the majority of the market. The first part of your question, the to-dos with regard to the sterility launch are the final elements of our development process, which includes the transfer to manufacturing. So think of this as the final stages of the R&D process, and then the progressive handoff to the manufacturing organizations that will be charged with scaling up the product for commercial release and shipment to customers.

Speaker Change: The market today, and certainly not in the legacy.

Speaker Change: Companion manual method, which is still the majority of the market.

Speaker Change: The first part of your question that to do with regard to.

Speaker Change: This early launch our final or the final elements of our development process to include the transfer to manufacturing. So think of this as the the final stages of the R&D process and then the the progressive hand off to the manufacturing organizations that will be.

Speaker Change: <unk>.

Speaker Change: <unk> with scaling up.

Speaker Change: The product for for commercial release and shipment to customers.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Okay.

Daniel Anthony Arias: The next question comes from the line of Dan Arias from Stifel. Please go ahead.

Speaker Change: The next question comes from the line of Dan Arias from Stifel. Please go ahead.

Daniel Anthony Arias: Good morning, guys. Thanks for the questions. Rob can you, maybe just talk a little bit about the confidence that you have and the acceleration of the instrument placement trajectory I think by the end of the year you are looking for something higher than where you are just based on that comment alone, but should we think 1% to two systems higher or by the time <unk> rolls around can you be I actually have.

Robert G. Spignesi: have and the acceleration of the instrument placement trajectory? I think by the end of the year you're looking for something higher than where you are just based on that comment alone, but should we think one to two systems higher, or by the time 4Q rolls around, can you be, you know, I actually have you more than double what you did in 1Q? So just checking to make sure that you're on a path and that the sales funnel is suggesting that you get more than just a couple of boxes higher Yeah, so

Daniel Anthony Arias: You did more than double what you did in <unk>. So.

Daniel Anthony Arias: Just checking to make sure that you're on a path and that the sales funnel is suggestive of of getting more than just a couple of box is higher so that the full year kind of jives with where we are.

Robert G. Spignesi: Yeah, Competent is standing behind our full-year guidance of at least 20 system placements, and Competent is driven by a number of factors, you know, sales teams in the field executing globally, a fully staffed team. The funnel, in particular, looks like we want it to look to backstop our guidance, the size and the composition, the geographic, the diversity of it, the customer diversity of it. And customers, you know, continue to spend a lot of time with customers, and this is where quite a bit of the confidence comes from as well, because customers are increasingly planning, continuing to plan deployments across their manufacturing networks, and increasingly, I'm seeing automation being viewed as a critical strategic priority across customers' networks, including our automation.

Yes, so our comp.

Daniel Anthony Arias: Competent standing behind our are our full year guidance of at least 20 system placements and confidence is driven by.

Daniel Anthony Arias: A number of factors sales teams in the field executing globally, a fully staffed team.

Daniel Anthony Arias: Funnel in particular, it looks like we want it to look to.

To backstop, our our guidance the size and composition.

Daniel Anthony Arias: The geographic diversity of customer diversity of it.

Daniel Anthony Arias: Customers continue to spend a lot of time with customers and this is where quite a bit of confidence comes from as well.

Daniel Anthony Arias: As customers are increasingly planning.

Daniel Anthony Arias: Continuing to planned deployments across our manufacturing network and increasingly I'm seeing automation being viewed as a as a as a critical strategic priority across across customers' networks to include our our automation I mentioned as well.

Robert G. Spignesi: I mentioned as well, which is helpful for our guide, that we continue to get access to senior-level executives at customers. You know, we are becoming more of a strategic A, a platform, and B, a larger spend from a practical standpoint in some of these large customers' quality manufacturing operations, and accordingly, we get better access to senior-level decision makers, and that's where I spend quite a bit of my time as well. So that provides insight and confidence as well. And the last one would be sterility.

Daniel Anthony Arias: <unk> is helpful for our.

Daniel Anthony Arias: For our guide as we continue to get access to senior level executives at customers, we are becoming more of a strategic platform and be a larger spend from a practical standpoint, and some of these large customers quality of manufacturing operations and accordingly, we've got we get better access to senior level.

Daniel Anthony Arias: Decision makers, and Thats, where I spend quite a bit of my time as well so that provides insight and confidence as well.

Daniel Anthony Arias: Last one would be sterility I think we've mentioned we don't we're not we're not.

Robert G. Spignesi: I think we've mentioned we don't, we're not sort of expecting an enormous impact in the year, but we're serving the right to upside. So a number of these elements are colluding to give us confidence in our guide, you know, notwithstanding the potential impact of Yuko's question of budget scrutiny.

Daniel Anthony Arias: Not sort of.

Daniel Anthony Arias: Expecting an enormous.

Daniel Anthony Arias: Packed in the year, but we're serving the right for upside. So a number of these elements are colluding to give us confidence in our guide.

Daniel Anthony Arias: Notwithstanding the potential impact that <unk> question of our budget scrutiny.

Speaker Change: Yep Okay.

Sean Wirtjes: And then maybe on the consumable side, and this might be a question for Sean, but can you just talk a little bit about the consistency of where you are here going forward? And then with that, or within that, there is a question about the customer that sold the site, I believe last quarter, which was impactful. Can you talk about that this quarter and then whether you're gaining some visibility on what that reacceleration at that one customer might look like?

Speaker Change: And then maybe on the consumable side.

Speaker Change: Question for Sean, but can you just talk a little bit about the consistency of where you are here going forward.

Speaker Change: Embedded with that or within that is a question about the customer that had sold the site I believe last quarter, which was impactful when you talk about that this quarter and then whether you are gaining some visibility on what that reacceleration at that one customer might look like yet.

Sean Wirtjes: Yep, sure. Yeah, so I think, you know, this quarter, as we mentioned in the prepared remarks, we did have some things that we expected in Q2 happen in Q1. So the growth, you know, that Rob mentioned, 22%, was the highest growth in the business amongst the different product and service lines. And that does reflect a tough comp because of that customer site sale that you mentioned. So we did not have any benefit from that in Q1.

Speaker Change: Yes, sure, yes, so I think this quarter as we mentioned in the prepared remarks that we did have some things that we expected in Q2 happened in Q1.

Speaker Change: So the growth.

Speaker Change: Rob mentioned, 22%.

Speaker Change: Was the highest growth in the business and kind of amongst the different product and service lines.

Speaker Change: And that does reflect a tough comp because of that customer site sale that you mentioned so that didn't we did not have benefit from that in Q1, we clearly did have consumable sales into that site that kind of an ongoing high level in Q1 last year.

Sean Wirtjes: We clearly did have consumable sales into that site at kind of an ongoing high level in Q1 last year. So, you know that 22% would have been higher if it were not for that net, that challenging comp as a result. So, you know, looking forward, you guided down sequentially in Q2. You know, largely based on the timing of the orders and the shipments of the consumables. So, you know, you've seen it the past couple years.

Speaker Change: So that that 22% would have been higher if it were not for that net that challenging comp as a result.

Looking forward.

Speaker Change: Guided down sequentially in Q2, largely based on the timing of the orders and the shipments of the consumables. So you have seen at the past couple of years, we do have a tendency to bounce around from quarter to quarter I think more important to look at the annual trends and kind of where things are going in the pull through.

Sean Wirtjes: We do have a tendency to bounce around from quarter to quarter, but I think it's more important to look at the annual trends and kind of where things are going in the pull through. You know, the pull through was above 80% in a quarter. I think we talked last quarter about that pull through for the year looking relatively flat this year, in part because of that That site sale last year part of the way through the year. Excuse me. So I think with I don't think it's going to be particularly close to the level that that site was bought at in 2023 or the first half of 2023, but it is a positive sign for us that it feels like things are going in a direction where there will be coming off the Zero and moving up into some revenue contribution from that site in the second half.

The pull through was was above 80% in the quarter I think we talked last quarter about it.

Speaker Change: That pull through for the year looking relatively flat this year in part because of that.

Speaker Change: That site sale last year part of the way through the year through the year excuse me. So I think with them. We are in touch with them I do expect we will see some contribution from them more in the second half of the year I don't think its going to be <unk>.

Speaker Change: Particularly close to the level that that that site bought at.

Speaker Change: In 2023 of the first half of 2023, but it is a positive sign for us that it feels like things are going the direction, where they will be coming off the zero and moving up into some revenue contribution from that site in the second half.

Daniel Anthony Arias: Okay, and just to finish that thought, it feels like it's, you know, I know we're still in the first half of 2024. But if I think about 2025, are you okay feeling like we're not going to have to sort of explain away that situation come the beginning of the year and that, actually, against the comps of this year, can it be a tail end? Yeah, I don't. I don't see why that would.

Speaker Change: Okay, and then just to finish that thought it feels like it's.

Speaker Change: Sure.

Speaker Change: Bill in the first half of 2024, but if I think about 2025.

Speaker Change: Are you, okay, feeling like we're not going to have to sort of explain away that situation from the beginning of the year and that actually against the comps of this year. It can it can be a tailwind.

Sean Wirtjes: Yeah, I don't I don't see why that would. I mean, if anything, it should be a little bit of a tailwind next year on the comp. So yeah, I don't think I don't think it'll be a negative discussion item in 25 Okay, super. Thank you.

Bill: Yes, I don't I don't see why that would.

Bill: I mean, if anything it should be a little bit of a tailwind next year on the comp. So yes, I don't think I don't think there'll be a negative discussion item in 'twenty five.

Speaker Change: Okay Super Thank you.

Speaker Change: Thanks, Dan.

Poon Mah: The next question comes from the line of Stephen Mah from TD Collins. Please go ahead.

The next question comes from the line of Steven Mah from TD colleagues. Please go ahead.

Robert G. Spignesi: Great. Thanks for taking the questions. On rapid sterility for the June demo, can you give us a sense of the interest and types of organizations that are going to be attending?

Poon Mah: Hi, great. Thanks for taking the questions.

Speaker Change: Yes.

Speaker Change: Rapid sterility on the June.

Poon Mah: <unk> can you give us a sense for the interest in types of organizations that we're going to be attending.

Robert G. Spignesi: Yeah, so we're still compiling all the customers, Steve, but we expect a representation from our current customer base, which leans towards biologics and cell and gene therapies, but also customers from other segments such as sterile and injectable manufacturing, where we're a bit less represented in our current placement. So the approach and strategy around sterility are certainly gaining penetration within our current customers, which is significant. As you know, we have a majority of the global top 20. I would say attracting new global top 20 companies that we don't have to include new segments as well. So we do expect a broad array and a diverse group of customers.

June: Yes, so we're still compiling all the customers are Steve, but we expect.

June: Representation from our current customer base, which is which leans towards biologics and cell and gene therapies, but also.

June: Customers from other segments, such as sterile injectable manufacturing, where we're a bit less represented.

June: And our current placement so.

The approach and strategy around sterility is certainly penetration within our current customers, which is which is significant as you know we have the majority of the global top 20.

June: I would say attracting new global top 20 companies. We don't have to include new segments as well. So we do expect a abroad array in a diverse group of customers for those events.

Poon Mah: Okay, great. Thanks. And then, maybe speaking on rapid sterility, I think you mentioned before on a previous call that there would be a technical presentation at a conference.

Speaker Change: Yes, Okay, great. Thanks, and then maybe just sticking on rapid sterility.

Mentioned before in a prior call that there'd be a technical presentation.

Robert G. Spignesi: Was that the trade show that you mentioned? It was. So... Yeah. Okay.

Speaker Change: At a conference was that the trade show that you mentioned it was though yes, okay. Yes.

Poon Mah: Yeah, yeah, we had it. We had it. Data published? I'm sorry? Was that data published somewhere, or a white paper?

Speaker Change: We had the data public I'm sorry.

Speaker Change: Was that data published somewhere our white paper.

Robert G. Spignesi: No, we have some internal documentation that was publicly disclosed at the show, but we don't have a formalized, I would call a white paper, that we would ultimately plan to do either with our internal groups or with a customer. What we do have is our internal test data and our top-level product claims, at this point, available.

Speaker Change: No. We have we have so we have some internal documentation that's been publicly furnished at the at the show, but we don't have a.

Speaker Change: A formalized I would call white paper that we would ultimately plan to do either with our internal groups or with a.

Speaker Change: Or with a.

Speaker Change: Our customer what we do have as our internal.

Speaker Change: Test data and our our top level product claims at this point available.

Speaker Change: Okay.

Poon Mah: Okay, great. And then last one for me, you know, sticking on Rapid Sterility, you know, the dedicated Rapid Sterility sales force. Is that sales force now fully staffed, ramped up, and ready for the launch? Yes, yeah. So we touched on this last on the last call.

Speaker Change: Okay, Great and then last one for me.

Speaker Change: Sticking on rapid sterility.

Speaker Change: On the dedicated rapid sterility Salesforce is that sales force now fully staffed ramped up and ready for the launch.

Robert G. Spignesi: Our core commercial approach is to leverage our existing sales force, who have been trained on and continue to be increasingly trained on the platform. We will likely have a sterility specialist or specialist that can help with specific elements of the application discussion with customers. But we don't imagine standing up a dedicated standalone sterility sales force per se.

Speaker Change: Yes, so we touched on this last.

Speaker Change: Last call.

Speaker Change: Our core commercial approach is to leverage our existing sales force who has been.

Speaker Change: <unk> and continues to be increasingly trained on on the platform.

Speaker Change: We will likely have a sterility specialist or specialist.

Speaker Change: That can help with specific elements of the application discussion with customers. So we don't envision.

Speaker Change: Standing up a dedicated Standalone sterility sales force per se.

Speaker Change: Okay, great. Thanks, a quick clarification.

Speaker Change: Sure Great.

Robert G. Spignesi: Well, thanks for the questions, Steve and everyone. So, thank you all for joining us today. Have a great weekend. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Well thanks for the question Steve on everyone. So thank you all for joining today.

Speaker Change: Have a great weekend.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. www.microsoft.com.ca www.microsoft.com.ca My name is John, and I will be your conference operator for today. All lines have been placed on mute to prevent any background noise.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

[music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Yes.

Speaker Change: [music].

Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Operator: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mike Beaulieu, Head of Investor Relations. Please go ahead.

John: Thank you for standing by my name is John and I'll be your conference operator for today all lines have been placed on mute to prevent any background noise.

John: After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time keep your press star followed by the number one on your telephone keypad. If you would like to withdraw your question grasp Irwin again. Thank you I would now like to turn the call over to Mike Bolger.

Michael Beaulieu: Head of Investor Relations. Please go ahead.

Michael Beaulieu: Good morning, and thank you for joining the rapid micro Biosystems first quarter 2024 earnings call. Joining me on the call are Rob <unk>, President and Chief Executive Officer, and Shaun <unk> Chief Financial Officer.

Michael Beaulieu: Earlier today, we issued a press release announcing our first quarter 2024 financial results.

Michael Beaulieu: Copy of the release is available on the company's website at rapid microbiome dot com under investors in the news and events section.

Before we begin I'd like to remind you that many statements made during this call maybe 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 1095.

Michael Beaulieu: 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.

Anticipated future cash usage and cash runway guidance for 2024, including revenues expenses gross margin system placements and validation activities expectations for and planned activities related to the company's business development and growth.

Customer interest and adoption of the growth direct system statements regarding the planned launch and commercialization of rapid sterility and the potential impact of macroeconomic uncertainty on rapid micros business.

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

For a list and description of these risks and uncertainties associated with rapid micros business. Please refer to the risk factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission as updated from time to time in our subsequent filings with the SEC.

Michael Beaulieu: 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.

Michael Beaulieu: This conference call contains time sensitive information and is accurate only as of the live broadcast today may three 2024.

Michael Beaulieu: 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: And with that I'll now turn the call over to Ron.

Robert G. Spignesi: Thank you, Mike. Good morning, everyone, and thank you for joining us.

Ron: Thank you Mike Good morning, everyone and thank you for joining us I will begin this morning's call with an overview of our first quarter performance and highlights followed by a review of our priorities for 2024.

Ron: I will then turn the call over to Sean for a more detailed review of our financial results and outlook.

Sean: First quarter total revenue increased 11% to $5 $6 million.

Sean: Compared to the first quarter of 2023.

This performance is ahead of the guidance, we provided in March and represents the sixth quarter in a row that our revenue exceeded guidance.

Sean: We placed three growth direct systems in the quarter also existing customers.

Sean: First quarter recurring revenue increased 15% compared to Q1 2023 and has now grown by double digits in each of the 11 quarters since we became a public company.

Sean: Consumable sales, which are part of recurring revenue increased 22% year over year and achieved a new quarterly record.

Sean: Exceeding our prior record set in the second quarter of 2023.

Sean: This strength in consumables demonstrates that customers are actively using their growth direct systems and are realizing value across their global manufacturing networks.

Sean: We continue to execute against our strategic priorities of accelerating system placements, improving gross margins commercializing innovative new products and prudently managing our cash.

Sean: I'd like to provide a brief update and context for these priorities.

Robert G. Spignesi: Over the past few months, I visited with customers across North America and Europe. These meetings are always productive, and I would like to provide some recent customer feedback. The growth direct value proposition is resonating, and customers are realizing meaningful benefits. They continue to plan further deployment of growth direct systems across their global manufacturing network. The many benefits of Adroit Direct's full automation include enhanced data integrity and improved accuracy.

Speaker Change: Over the past few months I visited with customers across North America and Europe.

Speaker Change: These meetings are always productive.

Speaker Change: To provide some recent customer feedback.

Speaker Change: The growth direct value proposition is resonating and customers are realizing meaningful benefits. They continue to play and further deployment of growth direct systems across our global manufacturing networks.

Speaker Change: The many benefits.

Speaker Change: The growth of Rx full automation include enhanced data integrity improved accuracy.

Robert G. Spignesi: reducing human error and lower hands-on labor costs. In addition, the Growth Rec offers operational efficiencies that can enable faster product release, less waste, and reduce inventory. Moreover, given the clear demand in the industry for increased manufacturing capacity, Growth Direct's speed and efficiency provide critical flexibility to manufacturing and quality control operations and can enable customers to unlock additional production capacity. Importantly, these operational efficiencies, which are ideally suited for the advanced modalities of biologics and cell and gene therapies, are also effective for other segments, such as vaccines, sterile injectables, and small molecule manufacturing. The pace of growth in advanced modalities and the need for improved data integrity industry-wide are accelerating the adoption of automation.

Speaker Change: This human error and lower hands on labor costs.

Speaker Change: In addition, the goldstrike offers operational efficiencies, which can enable faster product release less waste and reduce inventories.

Moreover, given the clear demand in the industry for increased manufacturing capacity.

Speaker Change: The growth of our <unk> speed and efficiency provide critical flexibility to manufacturing and quality control operations and can enable customers to unlock additional production capacity.

Speaker Change: Importantly, these operational efficiencies, which are ideally suited for the advanced modalities of biologics and cell and gene therapies are also effective for other segments, such as vaccines sterile injectables and small molecule manufacturing.

Speaker Change: The pace of growth in advanced modalities and the need for improved data integrity industrywide is accelerating the adoption of automation.

Robert G. Spignesi: As customers implement automation across their manufacturing networks, we are confident that Growth Direct is an important part of the solution. We continue to expect an acceleration in system placements in the second half of the year. Our confidence is underpinned by the size and quality of our sales funnel, a fully staffed global sales team, and visibility into growth direct purchases from our customers' senior level executives. Turning to our next priority, which is improving gross margins. We expect to continue to benefit from our initiatives focused on product cost reduction, manufacturing efficiency, and service productivity improvement.

Speaker Change: As customers implement automation across our manufacturing networks, we are confident that the growth direct is an important part of the solution.

Speaker Change: We continue to expect an acceleration in system placements in the second half of the year, our confidence is underpinned by the size and quality of our sales funnel a fully staffed global sales team and visibility into growth direct purchases from our customers' senior level executives.

Speaker Change: Turning to our next priority, which is improving gross margins, we expect to continue to benefit from our initiatives focused on product cost reduction Manny.

Speaker Change: Manufacturing efficiency and service productivity improvements.

Robert G. Spignesi: We remain on track for an inflection to positive gross margins in the second half of the year. Next, we look forward to the successful launch and commercialization of Rapid Serility. Since our announcement earlier this year, customer interest in this breakthrough technology has been growing and has exceeded our expectations. Our commercial teams are trained, and we are completing the technology transfer from R&D to manufacturing with the associated scale-up activity. In June, we are hosting customers at our Lexington Innovation Center and Demonstration Lab for a live, hands-on experience with the GrowthDirect Rapid Sterility platform.

Speaker Change: We remain on track for an inflection to positive gross margins in the second half of the year.

Speaker Change: Next we look forward to the successful launch and commercialization of rapid sterility.

Speaker Change: Since our announcement earlier this year customer interest for this breakthrough technology has been growing and has exceeded our expectations.

Speaker Change: Our commercial teams are trained and we are completing the technology transfer from R&D and into manufacturing with the associated scale up activities.

Speaker Change: In June we are hosting customers at our lessons and innovation center and demonstration lab for a live hands on experience with the growth of Reg rapid sterility platform.

Robert G. Spignesi: We remain on schedule for a mid-2024 launch and look forward to providing an update on our second quarter earnings call in early August. Turning to cash management, we are focused on reducing our cash burn by tightly controlling operating expenses, capital expenditures, and working capital.

Speaker Change: We remain on schedule for a mid 2024 launch and look forward to providing an update on our second quarter earnings call in early August.

Speaker Change: Turning to cash management, we are focused on reducing our cash burn by tightly controlling operating expenses capital expenditures and working capital.

Robert G. Spignesi: So, to summarize our key messages from the first quarter, it was a solid start to 2024, including a record quarter in consumable revenue. The Growth Directive provides a strong value proposition by delivering full automation, operational efficiencies, and improved data integrity; customers continue to plan further deployment of GrowthDirect systems across their global manufacturing network. Early customer interest in Rapid Sterility is strong, and we are on schedule for a mid-year launch. Wrapping up my prepared remarks, I remain excited about our long-term outlook.

Speaker Change: So to summarize our key messages from the first quarter. It was a solid start to 2024, including a record quarter in consumable revenue.

Speaker Change: The growth directly providing a strong value proposition by delivering full automation operational efficiencies and an improved data integrity customers continue to plan further deployment of growth were X systems across our global manufacturing networks.

Speaker Change: Early customer interest and rapid sterility is strong and we are on schedule for a mid year launch.

Speaker Change: Wrapping up my prepared remarks, I remain excited about our long term outlook, we have a world class customer base, consisting of 70% of the top 20 global pharma companies.

Robert G. Spignesi: We have a world-class customer base consisting of 70% of the top 20 global pharma companies, a proven technology with a strong value proposition that is embedded in customer work, and an Attractive High-Growth Business Model with Durable Recurring Revenue. We are focused on our path to profitability and expect our cost, efficiency, and productivity initiatives to lead to positive gross margins in the second half of 2024 with continued improvement thereafter. And with that, I'll now turn the call over to Sean to discuss our first quarter performance and our outlook in more detail.

Proven technology with a strong value proposition that is embedded in customer workflows in attractive high growth business model with durable recurring revenue.

Speaker Change: And we are focused on our path to profitability and expect our cost efficiency and productivity initiatives to lead to positive gross margins in the second half of 2024 with continued improvement thereafter.

Speaker Change: And with that I'll now turn the call over to Sean to discuss our first quarter performance and our outlook in more detail.

Sean.

Sean: Thanks, Rob and good morning, everyone.

Sean Wirtjes: Thanks, Rob, and good morning, everyone. I'll start my comments today with a review of our first quarter results and then discuss our second quarter and full year 2024 outlook. Q1 revenue increased 11% to $5.6 million compared to $5 million in Q1 2023. During the first quarter, we placed three growth directives, compared to three in the first quarter last year.

Sean: I'll start my comments today with a review of our first quarter results and then discuss our second quarter and full year 2020 for outlook.

Sean: Q1 revenue increased 11% to $5 6 million compared to $5 million in Q1 2023.

Sean: During the first quarter, we placed three growth <unk> systems compared to three in the first quarter last year. We also completed three validation in the quarter compared to two in the first quarter last year.

Sean: Product revenue, which is comprised of systems and consumables increased 12% to $3 7 million in the quarter compared to $3 3 million in Q1 last year. The growth in product revenue was primarily driven by a record quarter on consumables as a result of continued growth and validated systems as well as several shipments made.

Sean: During Q1 that were originally expected in Q2.

Sean: Service revenue increased 11% to $1 9 million in the first quarter compared to $1 $7 million in Q1 last year.

Sean: Service revenue growth was impacted in Q1 by some planned validation revenue that shifted into early Q2.

Sean Wirtjes: First quarter recurring revenue, which consists of consumables and annual service contracts, increased 15% to $3.7 million, compared to $3.3 million in Q1 last year. Non-recurring revenue, which is comprised mainly of systems and validation revenue, was $1.9 million in Q1, compared to $1.8 million in the prior year quarter. Turning to gross margins, product margins were negative $1.5 million in Q1, compared to negative $1.7 million in the first quarter last year. As we expected, and is typical for our business, Q1 product margins stepped down from Q4 2023, mainly due to lower system placements and revenue.

Sean: Compared to $3 3 million in Q1 last year non.

Sean: Nonrecurring revenue, which is comprised mainly of systems and validation revenue was $1 9 million in Q1 compared to $1 8 million in the prior year quarter.

Turning to gross margins product margins were negative $1 5 million in Q1 compared to negative $1 $7 million in the first quarter last year.

Sean: As we expected and is typical for our business Q1 product margin step down from Q4, 2023, mainly due to lower system placements and revenue.

Sean Wirtjes: Compared to Q1 last year, the improvement was attributable to continued benefits from actions we've taken to lower product costs and increase manufacturing efficiency. However, these benefits were partially offset by some customer site readiness delays, which shifted $0.2 million in high-margin LIM software revenue from Q1 into Q2, an unfavorable product mix due to the higher proportion of consumable revenue in Q1 this year.

Sean: Compared to Q1 last year. The improvement was attributable to continued benefits from actions, we've taken to lower product costs and increased manufacturing efficiency.

Sean: These benefits were partially offset by some customer site readiness delays.

Sean: Which shifted zero point $2 million in high margin limb software revenue from Q1 into Q2.

Sean: An unfavorable product mix due to the higher proportion of consumable revenue in Q1 this year.

Sean: Service margins were slightly negative in the first quarter largely due to nonrecurring expenses. This compares to negative <unk> $1 million in the first quarter last year.

Sean: On a combined basis, our first quarter gross margin was negative $1 5 million or negative, 27% compared to negative $1 8 million or negative 36% in Q1 last year.

Sean: R&D expenses were $3 8 million in Q1, an increase of 22% versus the prior year period, largely due to activities associated with the upcoming launch of rapid sterility.

Sean: Net loss was $13 3 million in Q1. This compares to a net loss of $13 9 million in Q1 last year.

Sean: Net loss per share was 31 <unk> in Q1 compared to net loss per share of <unk> 32 in the prior year quarter.

Sean: With respect to noncash expenses and capital expenditures.

Sean: Depreciation and amortization expenses were zero point $8 million stock.

Sean: Stock compensation expense was $1 1 million and capital expenditures were zero point $6 million in the first quarter.

Sean: We ended the first quarter with approximately $80 million of cash and investments on our balance sheet.

Speaker Change: I'll now turn to our Q2 and full year 2020 for outlook.

Speaker Change: We continue to expect total revenue of at least $27 million for the full year 2024, which assumes that we will replace at least 20 systems.

Speaker Change: This implies year over year revenue growth of at least 20%.

Speaker Change: This guidance continues to reflect some uncertainty related to the timing and scale of customer purchase decisions.

Sean Wirtjes: For the second quarter, we expect total revenue of at least $6 million, which assumes at least four system places. We then expect revenue and placements to increase sequentially in Q3 and peak in Q4, consistent with our typical annual cadence and the guidance we provided in March. Looking at consumables, we expect revenue to decrease sequentially in Q2 compared to Q1 due primarily to the timing of customer orders and shipments. We then expect consumable revenue to increase sequentially in Q3 and then again in Q4 as mortgage systems complete validation and enter routine use.

For the second quarter, we expect total revenue of at least $6 million, which assumes at least for system placements.

Speaker Change: We then expect revenue and placements to increase sequentially in Q3 and peak in Q4, consistent with our typical annual cadence in the guidance we provided in March.

Speaker Change: With respect to service, we expect revenues to be between 2 million and $2 5 million each quarter over the balance of the year with variability within this range, primarily driven by the timing of validation activities.

Speaker Change: We are reaffirming our guidance of at least 16 validation in 2024, including at least four in the second quarter.

Sean Wirtjes: Turning to gross margins, we expect meaningful sequential improvement in the second quarter compared to the first quarter, but we still expect Q2 margins to be negative. Thereafter, we continue to expect positive gross margins in both Q3 and Q4, as well as for the full year. We expect product margins to improve each quarter based on ongoing cost reduction and manufacturing efficiency initiatives, as well as increasing volume, but remain negative. We expect double-digit positive service margins in each of the remaining three-quarters of the year based on higher revenue and improved productivity.

Turning to gross margins we expect.

Speaker Change: Meaningful sequential improvement in the second quarter compared to the first quarter, but we still expect Q2 margins to be negative.

Speaker Change: Thereafter, we continue to expect positive gross margins in both Q3 and Q4 as well as for the full year.

Speaker Change: We expect product margins to improve each quarter based on ongoing cost reduction and manufacturing efficiency initiatives as well as increasing volume but remained negative.

Speaker Change: We expect double digit positive service margins in each of the remaining three quarters of the year based on higher revenue and improved productivity.

Speaker Change: We continue to expect operating expenses to be in a range of 48 million to $52 million in 2024, with depreciation and amortization expense of approximately $3 million stock compensation expense of approximately $5 million capex of approximately $3 million and other income which is.

Speaker Change: Comprised primarily of interest income of approximately $4 million.

Speaker Change: Finally, we continue to expect cash burn of roughly $40 million for the full year 2024 looking.

Sean Wirtjes: Finally, we continue to expect cash burn of roughly $40 million for the full year 2024. Looking out further, our goal is to reduce cash burn meaningfully over each of the next several years as we drive towards profitability through a combination of revenue growth, margin improvement, and management of our OpEx, CapEx, and working capital. This supports our expectation that our existing cash and investments will provide us with runway at least into the second half of 2026. That concludes my comments, so at this point, we'll open the call up for questions. Operator?

Speaker Change: That concludes my comments so at this point, we'll open the call up for questions operator.

Operator: At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. We'll pause for just a moment to compile the Q&A roster. The first question comes from the line of Tejas Savan from Morgan Stanley. Please go ahead.

Speaker Change: At this time, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question seem to press Star One again, we'll pause for just a moment to compile the Q&A roster.

Speaker Change: The first question comes from the line of Tejas Savant from Morgan Stanley. Please go ahead.

Yuko Oku: Good morning, this is Yuko on the call for Tasia to take a question. Some of your peers have been seeing worsening budget pressure, leading to further elongation of sales cycles. Could you elaborate on whether you're seeing a similar dynamic and what's your take on the customer sentiment with respect to large CapEx purchases?

Tejas Savant: Good morning.

Tejas Savant: On the call for T J F.

Tejas Savant: To your question.

Tejas Savant: Some of your peers have been seen worsening budget pressure.

Tejas Savant: Further along on sales cycles could you elaborate on whether you're seeing a similar dynamic in what's your take on the customer.

Speaker Change: Oh man.

Speaker Change: With respect to large capex purchases.

Robert G. Spignesi: Hey Yuko, it's Rob. So, uh, our view and experience with customer budgets is similar to previous quarters. So what we're seeing is, I'd say, continued budget scrutiny with regard to CapEx. Purchases, and ours, at least for the Quality Control Labs, is on the larger end, so it can pick up the second part of your question as well.

Rob: Heiko, it's Rob so.

Rob: Our view and experience with customer budgets as is similar to previous quarters. So what we're seeing is.

Rob: I would say continued budget scrutiny with regard to capex purchases and ours at least for the quality control labs is on the larger end. So they can pick up the second part of your question as well so no meaningful lead different changes.

Robert G. Spignesi: So, no meaningfully different changes over the past few quarters. But we have seen, I would say, more scrutiny. There are more cycles with regard to approval processes, and it's a bit slower to get to an answer as well. That being said, we're executing through it. Moreover, another important dynamic to understand with Rapid Microbiosystems is that Growth Direct, in many cases, is considered a strategic project and program that impacts multiple sites around a customer's global manufacturing network. So while that doesn't insulate us from these dynamics, we have seen notable cases where our projects for Growth Direct purchases have continued to be prioritized.

Over the over the past few quarters, but we have seen I would say more scrutiny theres more cycles with regard to.

Rob: Approval processes slower too a bit slower to get to get to an answer as well that being said, where we're executing we're executing through it a Moreover, another important dynamic to understand.

Rob: With with rapid micro biosystems is the growth direct.

Rob: In many cases as.

Rob: Is considered a strategic project and program that impacts multiple sites around our customers' global manufacturing network. So it doesn't insulate us from these dynamics, we have seen notable cases, where.

Rob: Our our projects for growth direct purchases has continued to be prioritized.

Speaker Change: Got it thank you for that color and then separately.

Speaker Change: Follow up question.

Speaker Change: Sterilizer launch expected in the midyear timeframe could you elaborate on the remaining produce before commercial launch.

Speaker Change: <unk>.

Speaker Change: Something that Youre actively.

Speaker Change: According to your customer.

Speaker Change: Holding until the customer event, if you are <unk>.

Communicating the upcoming launch already could you give us a sense for the customer interest.

Speaker Change: Yes.

Speaker Change: Yes, so in reverse order, we have been we have been communicating to customers we were.

Speaker Change: <unk> communicated this at a recent trade show the PJM annual show earlier this year and the interest is as we expected quite strong it reaffirms our belief in our voice of customer work that the market needs a rapid sterility automated system that.

Speaker Change: That has what I would call differentiated features from what's available.

Speaker Change: In the market today, that's faster time to detection much faster time to results full automation and the full complement of value proposition that the growth direct provides walkaway full automation data integrity. Those are viewed those features are not available and alcohol and other technology enabled solutions in the <unk>.

Speaker Change: Market today, and certainly not in the legacy.

Speaker Change: Companion manual method, which is still the majority of the market.

Speaker Change: The first part of your question that to do with regard to.

Speaker Change: This early launch our final or the final elements of our development process to include the transfer to manufacturing so think of this as the.

Speaker Change: The final stages of the R&D process and then the.

Speaker Change: The progressive handoff to the manufacturing organizations that will be.

Speaker Change: Be charged with scaling up the product for for commercial release and shipment to customers.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Okay.

Daniel Anthony Arias: The next question comes from the line of Dan Arias from Stifel. Please go ahead.

Speaker Change: The next question comes from the line of Dan Arias from Stifel. Please go ahead.

Daniel Anthony Arias: Good morning, guys. Thanks for the questions. Rob can you, maybe just talk a little bit about the confidence that you have and the acceleration of the instrument placement trajectory I think by the end of the year you are looking for something higher than where you are just based on that comment alone, but should we think one to two systems higher or by the time <unk> rolls around can you be I actually.

Daniel Anthony Arias: have and the acceleration of the instrument placement trajectory? I think by the end of the year you're looking for something higher than where you are just based on that comment alone, but should we think one to two systems higher or by the time four cue rolls around can you be, you know, I actually have more than double what you did in one cue, so just checking to make sure that you're on a path and that the sales funnel is suggestive of getting more than just a couple boxes higher so that the full year kind of jives with where we are.

Daniel Anthony Arias: You did more than double what you did in <unk>. So.

Robert G. Spignesi: Yeah, so confidence standing behind our full-year guidance of at least 20 system placements and confidence is driven by... a number of factors. Sales teams in the field executing globally, a fully staffed team.

Robert G. Spignesi: Yeah, so...

So are confident competent standing behind our are our full year guide and of at least 20 system placements and confidence is driven by.

Hi.

Daniel Anthony Arias: There are factors sales teams in the field executing globally, a fully staffed team the funnel in particular it looks like we want it to look to backstop, our our guidance the size and composition.

Robert G. Spignesi: The funnel, in particular, looks like we want it to look, to backstop our guidance, the size and the composition, the geography, the diversity of it, the customer diversity of it. And customers continue to spend a lot of time with customers, and this is where quite a bit of the confidence comes from as well, is that customers are increasingly planning, continuing to plan deployments across their manufacturing networks, and increasingly, I'm seeing automation being viewed as a critical strategic priority across customers' networks, including our automation.

Daniel Anthony Arias: The geographic diversity of customer diversity of it.

Daniel Anthony Arias: And customers continue to spend a lot of time with customers and this is where quite a bit of confidence comes from as well.

Daniel Anthony Arias: As customers are increasingly planning continuing to planned deployments across our manufacturing network and.

Daniel Anthony Arias: And increasingly I am seeing automation being viewed as a as a as a critical strategic priority across across customers' networks to include our our automation I mentioned as well which is helpful for our for.

Our guide as we continue to get access to senior level executives at customers.

Daniel Anthony Arias: We are becoming more of a strategic platform and be a larger spend from a practical standpoint, and some of these large customers quality of manufacturing operations and accordingly, we've got we get better access to senior level decision makers, and that's where I spent quite a bit of my time as well so that provides insight and <unk>.

Daniel Anthony Arias: <unk> as well.

Daniel Anthony Arias: Last one would be sterility I think we've mentioned we don't we're not we're not.

Daniel Anthony Arias: What's sort of.

Expecting an enormous impact in the year, but we're serving the right for upside. So a number of these elements are colluding to give us confidence in our guide.

Daniel Anthony Arias: Notwithstanding the potential impact that <unk> question of our budget scrutiny.

Yep Okay.

And then maybe on the consumable side.

Daniel Anthony Arias: It might be a question for Sean but can you just talk a little bit about the consistency of where you are here going forward.

Daniel Anthony Arias: Embedded with that or within that is a question about the customer that had sold the site I believe last quarter, which was impactful when you talk about that this quarter and then whether you are gaining some visibility on what that reacceleration at that one customer might look like yeah sure. Yeah. So I think this quarter as we mentioned in the prepared remarks.

Daniel Anthony Arias: We did have some things that we expected in Q2 happened in Q1.

Speaker Change: So the growth.

Rob: Rob mentioned, 22%.

Speaker Change: Was getting into the highest growth in the business and kind of amongst the different product and service lines.

Speaker Change: So that that 22% would have been higher if it were not for that net that challenging comp as a result.

Speaker Change: Looking forward.

Speaker Change: Guided down sequentially in Q2, largely based on the timing of the orders and the shipments of the consumable so you've seen it in the past couple of years, we do have a tendency to bounce around from quarter to quarter I think more important to look at the annual trends and kind of where things are going in the pull through.

Sean Wirtjes: We do have a tendency to bounce around from quarter to quarter, but I think it's more important to look at the annual trends and kind of where things are going in the pull through. You know, the pull through was above 80% in a quarter. I think we talked last quarter about that pull through for the year looking relatively flat this year, in part because of that That site sale last year part of the way through the year. Excuse me. So I think with I don't think it's going to be particularly close to the level that that site was bought at in 2023 or the first half of 2023, but it is a positive sign for us that it feels like things are going in a direction where there will be coming off the zero and moving up into some revenue contribution from that site in the second half.

Speaker Change: The pull through was was above 80% in the quarter I think we talked last quarter about.

Speaker Change: That pull through for the year looking relatively flat this year in part because of that.

Speaker Change: Particularly close to the level that that that site bought at.

Speaker Change: In 2023 of the first half of 2023, but it is a positive sign for us that it feels like things are going the direction, where there will still be coming off the zero and moving up into some revenue contribution from that site in the second half.

Daniel Anthony Arias: Okay, and just to finish that thought, it feels like it's, you know, I know we're still in the first half of 2024, but if I think about 2025, are you okay feeling like we're not going to have to sort of explain away that situation come the beginning of the year and that actually against the comps of this year? It can be a tail end.

Speaker Change: Okay, and then just to finish that thought it feels like it's lower.

Speaker Change: Bill in the first half of 2024, but if I think about 2025 are you. Okay. Feeling like we're not going to have to sort of explain away that situation come the beginning of the year and that actually against the comps of this year can it can be.

Speaker Change: Aylwin.

Speaker Change: Yes, I don't I don't see why that would.

Speaker Change: I mean, if anything it should be a little bit of a tailwind next year on the comp. So yes, I don't think I don't think there'll be a negative discussion item in 'twenty five.

Speaker Change: Okay Super Thank you.

Speaker Change: Thanks, Dan.

Poon Mah: The next question comes from the line of Stephen Mah from TD Collins. Please go ahead.

Speaker Change: The next question comes from the line of Steven Mah from TD Colin. Please go ahead.

Poon Mah: Okay, great. Thanks for taking the questions.

Poon Mah: On rapid sterility on the June.

Poon Mah: Demo can you give us a sense for the interest in types of organizations that we're going to be attending.

Robert G. Spignesi: Yeah, so we're still compiling all the customers, Steve, but we expect a representation from our current customer base, which leans towards biologics and cell and gene therapies, but also customers from other segments, such as sterile and injectable manufacturing, where we're a bit less represented in our current placement. So the approach and strategy around sterility are certainly gaining penetration within our current customers, which is significant. As you know, we have a majority of the global top 20. I would say attracting new global top 20 companies that we don't have to include new segments as well. So we do expect a broad array and a diverse group of customers.

Poon Mah: Yes, so we're still compiling all the customers are Steve, but we expect.

Poon Mah: Representation from our current customer base, which is which leans towards biologics and cell and gene therapies, but also.

Poon Mah: Customers from other segments, such as sterile injectable manufacturing, where we're a bit less represented in.

In our current placement so the.

The approach and strategy around sterility is certainly penetration within our current customers, which is which is significant as you know we have the majority of the global top 20.

Poon Mah: I would say attracting new global top 20 companies. We don't have to include new segments as well. So we do expect a abroad array in a diverse group of customers for those events.

Poon Mah: Okay, great. Thanks. And then maybe sticking on rapid sterility, I think you mentioned before on a previous call that there would be a technical presentation at a conference.

Speaker Change: Okay, great. Thanks, and then maybe just sticking on <unk>.

Speaker Change: <unk> I think you had mentioned before in a prior call that there'll be a technical presentation.

Robert G. Spignesi: Was that the trade show that you mentioned? It was. And so... Yeah. Okay. Yeah, yeah, we had it, we had it, we had it. Did you have data published? I'm sorry? Was that data published somewhere or a white paper or something?

Speaker Change: At a conference was that the trade show that you mentioned it was so yes, okay. Yes.

Speaker Change: We have an Ada Pablo I'm sorry.

Speaker Change: Was that data published somewhere our white paper.

Speaker Change: No. We have we have so we have some internal documentation that's been publicly furnished at the at the show, but we don't have a.

Speaker Change: Formalized I would call white paper that we would ultimately plan to do either with our internal groups or with a.

Speaker Change: Or with a.

Speaker Change: Our customer what we do have as our internal.

Speaker Change: <unk> test data and our our top level product claims at this point available.

Poon Mah: Okay, great. And then last one for me, sticking on Rapid Sterility, you know, the dedicated Rapid Sterility sales force. Is that sales force now fully staffed, ramped up, and ready for the launch? Yes. Yeah. So we touched on this last on the last call. Our core commercial approach is to leverage our existing sales force, who's been trained on and continues to be increasingly trained on the platform. We will likely have a sterility specialist or specialist that can help with specific elements of the application discussion with customers, but we don't imagine standing up a dedicated standalone sterility sales force per se. Okay, great. Thanks for the clarification.

Speaker Change: Okay, Great and then last one for me.

Speaker Change: <unk> is taking on rapid sterility.

Speaker Change: On the dedicated rapid sterility sales force is that sales force now fully staffed ramped up and ready for the launch.

Speaker Change: Yes, so we touched on this last on the last call.

Speaker Change: Our core commercial approach is to leverage our existing sales force who has been trained.

Speaker Change: Trained and continues to be increasingly trained on on the platform.

Speaker Change: We will likely have a sterility specialist or specialists.

Speaker Change: That can help with specific elements of the application discussion with customers, but we don't envision.

Speaker Change: Standing up a dedicated Standalone sterility sales force per se.

Speaker Change: Okay, great. Thanks, a quick clarification.

Speaker Change: Sure Great.

Robert G. Spignesi: Well, thanks for the question, Steve, and everyone. And thank you all for joining us today.

Speaker Change: Well thanks for the question Steve on everyone. So thank you all for joining today.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: And have a great weekend.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Q1 2024 Rapid Micro Biosystems Inc Earnings Call

Request a DemoDemo

RPID

Rapid Micro

Earnings