Rapid Micro Biosystems Inc (RPID) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Total Revenue: Increased 11% to $5.6 million in Q1 2024 compared to $5 million in Q1 2023.
Recurring Revenue: Rose 15% to $3.7 million in Q1 2024 from $3.3 million in Q1 2023.
Consumable Sales: Grew 22% year-over-year, setting a new quarterly record.
Product Revenue: Up 12% to $3.7 million in Q1 2024 from $3.3 million in Q1 2023.
Service Revenue: Increased 11% to $1.9 million in Q1 2024 from $1.7 million in Q1 2023.
Gross Margin: Improved to negative $1.5 million or -27% in Q1 2024 from negative $1.8 million or -36% in Q1 2023.
Net Loss: Reduced to $13.3 million in Q1 2024 from $13.9 million in Q1 2023.
Net Loss Per Share: Improved slightly to $0.31 in Q1 2024 from $0.32 in Q1 2023.
Full Year Revenue Guidance: Reaffirmed at least $27 million for 2024, implying at least 20% growth.
System Placements: At least 20 expected in 2024.
Cash and Investments: Ended Q1 2024 with approximately $80 million.
Cash Burn: Expected to be roughly $40 million for the full year 2024.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
First quarter total revenue increased 11% to $5.6 million compared to the first quarter of 2023, exceeding guidance for the sixth consecutive quarter.
Recurring revenue grew by 15% compared to Q1 2023, marking consistent double-digit growth in each of the 11 quarters since becoming a public company.
Consumable sales increased 22% year-over-year, setting a new quarterly record and demonstrating strong customer engagement with the Growth Direct systems.
Rapid Micro Biosystems reaffirmed its full-year 2024 revenue guidance of at least $27 million, indicating at least 20% growth and at least 20 system placements.
The company is on track for a mid-2024 launch of Rapid Sterility, with strong early customer interest and successful technology transfer from R&D to manufacturing.
Negative Points
Gross margins were negative in Q1, although there was an improvement compared to the same quarter last year.
The pace of system placements and revenue growth is subject to macroeconomic uncertainties and customer budget scrutiny, which could delay purchase decisions.
Service margins were slightly negative in the first quarter, largely due to non-recurring expenses.
The company reported a net loss of $13.3 million in Q1, although this was an improvement from a net loss of $13.9 million in Q1 last year.
There are ongoing challenges with customer site readiness, which have shifted some expected revenue and impacted product mix unfavorably.
Q & A Highlights
Q: Could you elaborate on whether you're seeing a similar dynamic to your peers in terms of worsening budget pressure and longer sales cycles for large CapEx purchases? A: (Robert Spignesi - President, CEO, Director) We are experiencing continued budget scrutiny with regard to CapEx purchases, similar to previous quarters. Approval processes are slower, but Growth Direct is often seen as a strategic project, which helps maintain its priority among our customers.
Q: With the Sterility launch expected mid-year, could you elaborate on the remaining tasks before commercial launch? Are you actively communicating this upcoming launch to your customers? A: (Robert Spignesi - President, CEO, Director) We are in the final stages of transferring the technology from R&D to manufacturing for scale-up. We have already communicated about this launch at recent tradeshows, and customer interest is strong, confirming the market need for a Rapid Sterility automated system.
Q: Can you discuss your confidence in the acceleration of instrument placement trajectory towards the end of the year? A: (Robert Spignesi - President, CEO, Director) I am confident in meeting our full-year guidance of at least 20 system placements. This confidence is based on a robust sales funnel, strategic customer engagements, and the strategic importance of automation in manufacturing, which is increasingly recognized by senior-level executives.
Q: Can you provide insights into the consistency of consumable revenue going forward, especially considering the impact of a customer site sale last quarter? A: (Sean Wirtjes - CFO) Consumable revenue grew 22% this quarter, despite a tough comparison due to a high base from a customer site sale last year. We expect some variability quarter-to-quarter but anticipate a general upward trend in consumable revenue.
Q: On Rapid Sterility, can you give us a sense of the interest and types of organizations attending the June demo? A: (Robert Spignesi - President, CEO, Director) We expect a diverse group of attendees, including representatives from biologics, cell and gene therapies, and sterile injectable manufacturing. This aligns with our strategy to penetrate current customers and attract new ones from different segments.
Q: Is the dedicated Rapid Sterility sales force fully staffed and ramped up for the launch? A: (Robert Spignesi - President, CEO, Director) We are leveraging our existing sales force, who are increasingly trained on the Rapid Sterility platform. We plan to have sterility specialists to assist with specific customer discussions, rather than a standalone sales force.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
