Executive Summary

Q1 revenue grew 28% year over year to $7.21M, a beat vs S&P Global consensus of ~$6.63M, driven by record service revenue on elevated validations; gross margin improved 33pts YoY to 6% as cost actions and service productivity gained traction . Results mark the company’s 10th straight quarter meeting or exceeding guidance .
EPS of -$0.26 was 1c better than consensus, with net loss improving to -$11.3M; product margin improved to -23% and service margin to 43% on mix, higher software, and lower service costs .
Management reaffirmed FY25 revenue of at least $32M, 21–25 placements, gross margin “high-single digits to low-teens,” OpEx $44–$48M, and ~$30M cash burn; Q2 revenue guided to $6.75–$7.75M with 4–7 placements and service revenue step-down as validations were pulled forward .
Catalysts: execution on Q2–Q4 placements/validations, margin trajectory (Mold Alarm/software and cost reduction), and initial supply-chain benefits from the MilliporeSigma collaboration; macro/tariff uncertainty viewed as manageable near term due to sourcing mix and USMCA exemptions .

What Went Well and What Went Wrong

What Went Well
- “Total first quarter revenue increased 28% to $7.2 million… service revenue increased 64%… and was a quarterly record,” showcasing diversified growth and execution across product and services .
- Margin progress: “first quarter gross margins were 6%, representing a 33 percentage point improvement,” aided by product cost reductions, manufacturing efficiencies, and service productivity .
- Strategic partnership: teams “highly engaged” with MilliporeSigma on joint commercial and cost workstreams; aim to accelerate system placements, improve margins, and drive innovation .
What Went Wrong
- Mix headwind in product margin: product margin remained negative (-23%), though improved from prior year; combined GM still low single digits, underscoring ongoing cost/mix work to reach sustainable double-digit margins .
- Q2 step-down in services: validations pulled forward elevated Q1 service revenue; Q2 service revenue guided down to $2.0–$2.5M, creating sequential revenue/margin headwind .
- Macro/tariff uncertainty: “incremental uncertainty” particularly in Europe; while direct impact is limited, management embeds variability in quarterly guidance and placement timing .

Financial Results

Headline metrics vs prior periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$7.60	$8.20	$7.21
Gross Margin (%)	8%	12%	6%
EPS (GAAP, $)	-0.26	-0.22	-0.26
System Placements (#)	7	6	3
Validations (#)	4	4	9

Q1 2025 vs S&P Global Wall Street consensus

Metric	Actual	Consensus Mean*	Surprise
Revenue ($M)	7.21	6.63*	+$0.58M
EPS (GAAP, $)	-0.26	-0.27*	+$0.01

Values marked with * retrieved from S&P Global.

Q1 2025 revenue composition and KPIs

Metric	Q1 2025	Q1 2024	YoY Δ
Product Revenue ($M)	4.10	3.71	+10%
Service Revenue ($M)	3.10	1.90	+64%
Recurring Revenue ($M)	4.00	3.70	+6%
System Placements (#)	3	3	Flat
Validations (#)	9	3	+6
Cumulative Placements (#)	165	—	—
Cumulative Validated (#)	146	—	—

Q1 2025 margin profile

Metric	Q1 2025	Q1 2024
Product Margin (%)	-23%	-39%
Service Margin (%)	43%	-3%
Gross Margin (%)	6%	-27%

Other P&L/balance sheet highlights: Q1 OpEx $12.1M (-5% YoY); net loss -$11.3M; cash/investments ~$41.7M and no debt as of March 31, 2025 .

Guidance Changes

Metric	Period	Previous Guidance (as of Q4’24 call, 2/28/25)	Current Guidance (Q1’25 call)	Change
Total Revenue	FY 2025	≥$32M	≥$32M	Maintained
System Placements	FY 2025	21–25	21–25	Maintained
Gross Margin (%)	FY 2025	High-single digits to low-teens	High-single digits to low-teens	Maintained
Operating Expenses	FY 2025	$44–$48M	$44–$48M	Maintained
Cash Burn	FY 2025	~-$30M	~-$30M	Maintained
Q2 Revenue	Q2 2025	—	$6.75–$7.75M	New detail
Q2 Placements	Q2 2025	—	4–7 systems	New detail
Q2 Service Revenue	Q2 2025	—	$2.0–$2.5M (step-down)	New detail
Validations	FY 2025	≥18 (with ≥5 in Q1)	≥18 (≥2 in Q2)	Maintained (phasing updated)
Gross Margin trajectory	2H 2025	Positive each quarter in 2025	Q2 similar to Q1; improve 2H on mix/cost	Maintained with color

Earnings Call Themes & Trends

Topic	Q3 2024	Q4 2024	Q1 2025	Trend
System placements & pipeline	Record Q3 revenue, 7 placements; global rollouts noted	6 placements; 21 in FY24; strong funnel	3 placements; multi-system deals in funnel, timing sensitivity	Stable to improving pipeline; quarterly timing variability
Margin expansion	GM inflected to +8%	GM 12%; service margin 47%	GM 6% (seasonal); product -23%, service 43%; sustained improvement vs PY	Structural progress; 2H improvement expected
MilliporeSigma collaboration	—	Announced; co-exclusive global distribution; cost/innovation scope	Early execution; training/planning; potential supply-chain benefits (late-2025+ upside)	Building; tangible cost synergies targeted
Macro/tariffs	—	—	EU tariff uncertainty; sourcing largely U.S./Canada/EU; minimal China; USMCA exemption on plastics	Manageable risk; monitoring
AI/software	—	Data/automation focus and Rapid Sterility pipeline	AI on roadmap; leveraging rich GD data; Mold Alarm software aids mix	Increasing focus
U.S. biopharma capex	—	—	>$150B multi-year U.S. pharma/biotech investments; new facilities favor automation	Tailwind over multi-year horizon

Management Commentary

“Total first quarter revenue increased 28% to $7.2 million… service revenue increased 64%… and was a quarterly record.” — Sean Wirtjes, CFO .
“Cost reduction… manufacturing efficiency and service productivity… drove significant gross margin expansion compared to the prior year quarter.” — Sean Wirtjes, CFO .
“Our collaboration with MilliporeSigma… provides opportunities to… accelerate Growth Direct system placements, improve gross margins and develop innovative products.” — Sean Wirtjes, CFO .
“Key projects are being prioritized… Growth Direct is part of that… while the environment is incrementally more uncertain… high-ROI key projects are being prioritized.” — Robert Spignesi, CEO .
“Software advancements to include AI are part of our R&D roadmap… our automation is creating an enormous amount of digital data.” — Robert Spignesi, CEO .

Q&A Highlights

Demand environment: Customers prioritizing high-ROI projects; multisystem orders in funnel support outlook despite incremental uncertainty (esp. Europe tariffs) .
Margins and tariffs: Sourcing largely U.S./EU; plastics from Canada exempt under USMCA; de minimis China exposure; exit-year margin trajectory unchanged; 2H uplift expected .
Validations: Guide for ≥18 in FY25 vs 16 in FY24, with potential upside as timing firms .
U.S. capex tailwind: Significant multi-year U.S. manufacturing investments (> $150B) seen as a demand driver for automation and standardization .
MilliporeSigma synergies: Active work on consumable materials sourcing and supply chain; base FY25 plan assumes no benefit, potential late-2025 upside with more material impact in 2026 .
AI strategy: Long-term opportunity to leverage GD data via software/AI; updates to come as R&D progresses .

Estimates Context

Q1 2025 beat: Revenue $7.21M vs $6.63M consensus; EPS -$0.26 vs -$0.27 consensus; coverage remains thin (Rev ests: 3; EPS ests: 1), suggesting models may need to adjust for elevated service activity timing and stronger software contribution . Values retrieved from S&P Global.
Forward context: Management guides Q2 revenue $6.75–$7.75M with services stepping down; models should reflect lower validation services in Q2, a step-up in consumables in 2H, and improving product margins alongside cost actions and software mix .

Key Takeaways for Investors

Execution remains consistent: 10 straight quarters at/above guidance and a material YoY margin delta despite seasonality; pipeline of multisystem deals supports FY25 revenue floor .
Quality of revenue mix improving: software and validation services drove Q1, with consumables and product margin gains targeted to lift 2H GM; watch Mold Alarm/software and cost reductions for incremental margin leverage .
Quarterly variability likely: Q2 service step-down and placement timing tied to customer construction imply near-term volatility; FY trajectory intact .
MilliporeSigma is a medium-term accelerant: commercial reach and supply-chain alignment can expand TAM and compress COGS; management assumes no FY25 contribution, pointing to potential upside in late-2025/2026 .
Macro manageable: Tariff exposure limited by sourcing mix and USMCA; company holds safety stock to defer purchases if needed .
Balance sheet runway: ~$41.7M cash/investments and no debt as of 3/31/25; FY25 cash burn guided to ~-$30M, down vs 2024 .
Near-term trading lens: Potential positive catalysts include Q2 placements hitting high end of range, evidence of 2H gross margin acceleration, and tangible supply-chain wins from MilliporeSigma.

Values retrieved from S&P Global: All consensus estimate values marked with *.

Sources: Q1 2025 8-K/press release and financials ; Q1 2025 press release ; Q1 2025 earnings call transcript ; Q4 2024 earnings call transcript ; Q3 2024 8-K .

RAPID MICRO BIOSYSTEMS, INC. (RPID)·Q1 2025 Earnings Summary