RAPID MICRO BIOSYSTEMS, INC. (RPID)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $7.26M, up 10% YoY, a modest beat vs S&P Global consensus of $7.03M; diluted EPS was -$0.27, slightly below consensus of -$0.25, while gross margin improved to 4% (+700 bps YoY) .*
• Management reaffirmed FY 2025 revenue guidance of at least $32.0M and guided Q3 revenue to $7.25–$8.00M with 4–6 system placements; they expect full‑year gross margin in the “high single digits to low teens” and year‑end cash of ~$40M .
• Execution remained broad-based: product revenue +6% to $4.80M, service revenue +18% to $2.46M, and recurring revenue +15% to $4.40M; placements were four systems with two validations, and cumulative placements/validated systems reached 169/148 .
• Liquidity was strengthened via a new five‑year $45M term loan (first $20M drawn, interest initially 11.5%, no financial or liquidity covenants), plus warrants issued at $3.35; proceeds support commercial expansion and margin initiatives .
• Near‑term headwinds include global trade/tariff dynamics delaying larger capital decisions; management now expects FY placements toward the low end of the 21–25 range, but cites consumables/service stability and MilliporeSigma partnership as offsetting support .

What Went Well and What Went Wrong

What Went Well

• Broad-based growth with product revenue +6% ($4.80M) and service revenue +18% ($2.46M); recurring revenue +15% ($4.40M) underscored durability .
• Continued gross margin improvement to 4% (fourth consecutive positive quarter); service margin reached 32%, with sequential product margin improvement vs Q1 .
• Liquidity/strategic flexibility improved via $45M term loan; “highly favorable terms, including no financial or liquidity covenants,” “positions us well to build on our meaningful progress” .
  Quote: “This facility significantly strengthens our financial position and reinforces our ability to achieve positive cash flow.” — CEO Robert Spignesi .

What Went Wrong

• EPS missed consensus modestly (-$0.27 vs -$0.25*); net loss remained elevated at $11.86M despite OpEx reductions .*
• Systems pace slower than prior year (four placements vs five last year) and validations (two vs five), reflecting site readiness and macro caution; FY placements expected at the low end of 21–25 .
• Tariff/trade dynamics introduced additional near‑term uncertainty on timing/scale of customer decisions for multi‑system projects, prompting cautious Q3/FY placements stance .

Financial Results

Balance sheet note: Cash & equivalents $18.33M, short‑term investments $12.92M (cash + investments $31.26M), restricted cash $0.28M at 6/30/25 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Total revenue increased 10%, driven by an 18% increase in Service revenue. Product revenue increased by 6%, led by mid‑teens growth in consumables… we are reiterating our full‑year 2025 revenue guidance.” — CEO Robert Spignesi .
• “We drew down the initial $20,000,000 tranche at closing… Importantly, the loan does not include financial or liquidity covenants and is non‑dilutive to shareholders.” — CEO Robert Spignesi .
• “Second quarter gross margin was 4%, marking our fourth consecutive quarter of positive gross margins… Product margins… improved by 12 percentage points vs Q1; Service margins were 32%.” — CFO Sean Wirtjes .
• “We expect Q3 revenue to be… $7.25M to $8.00M… For the full year 2025, gross margins… high single digits to low teens… operating expenses… $46M to $48M… end the year with roughly $40M in cash.” — CFO Sean Wirtjes .

Q&A Highlights

• Pharma decision timing: Management sees “encouraging signs” with high‑ROI projects prioritized, but acknowledges trade dynamics uncertainty; existing larger customers’ initiatives more resilient .
• Placements outlook: Teams “pounding the pavement,” but prudently modeling toward the low end of placements given near‑term funnel pace and global trade backdrop .
• Recurring revenue stability: Expect sequential step‑ups in consumables in Q3 and Q4; service revenue consistent with Q2, driven by validations and installed base .
• Margin levers: Procurement, volume pricing, manufacturing efficiency, waste reduction, consumables automation; partnership initiatives as 2026 tailwinds .
• Onshoring timeline: U.S. build‑outs favored, but timing depends on engineering/construction capacity; new facilities typically deploy next‑gen automation (fit for Growth Direct) .

Estimates Context

Values retrieved from S&P Global.*

Implications: Modest top‑line beat alongside a slight EPS miss suggests revenue mix/GM improvements are progressing, but elevated OpEx and product margins still weigh on EPS; Q3 guidance brackets consensus, setting up a “meet/beat” potential on revenue with margin execution a key swing factor .*

Key Takeaways for Investors

• Revenue durability anchored by consumables/service growth and a growing validated base; recurring revenue mitigates timing volatility in systems .
• Placement cadence likely at the low end of the FY range; near‑term macro/tariffs affect timing, but backlog/funnel and site readiness suggest second‑half placements remain plausible .
• Margin expansion remains a central thesis: product cost reductions, manufacturing efficiency, and service productivity are yielding sequential improvements; watch Q4 for “meaningful” GM uplift .
• Liquidity runway strengthened via $20M draw on a covenant‑lite $45M facility; expect ~$40M year‑end cash even as interest expense offsets interest income in H2 .
• MilliporeSigma partnership is strategic for 2026+ placements and supply chain efficiencies; training/commercial coordination underway, with potential purchase commitments beginning in 2026 .
• U.S. onshoring/build‑outs should favor Growth Direct’s automation value proposition; timing depends on engineering/construction capacity, but multi‑year tailwinds appear credible .
• Trading setup: Revenue momentum plus margin execution into Q4 and liquidity uplift are positive; risk factors are placements timing and tariff/trade uncertainty; monitor Q3 placements (4–6) and Q4 gross margin inflection .