Part I [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q1 2025 financial statements show a net loss of $11.3 million and total assets of $85.4 million [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $85.4 million, driven by reduced short-term investments, while liabilities and equity also declined Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $18,906 | $16,911 | | Short-term investments | $22,764 | $33,821 | | Total current assets | $69,182 | $80,917 | | Total assets | $85,434 | $98,169 | | **Liabilities & Equity** | | | | Total current liabilities | $14,996 | $17,565 | | Total liabilities | $19,943 | $22,817 | | Total stockholders' equity | $65,491 | $75,352 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue increased to $7.2 million, narrowing the loss from operations to $11.7 million and net loss to $11.3 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $7,205 | $5,611 | | Product Revenue | $4,101 | $3,713 | | Service Revenue | $3,104 | $1,898 | | Total Costs and Operating Expenses | $18,866 | $19,884 | | Loss from Operations | $(11,661) | $(14,273) | | Net Loss | $(11,263) | $(13,322) | | Net Loss Per Share | $(0.26) | $(0.31) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to $9.1 million, with overall cash increasing by $2.0 million to $19.3 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,065) | $(15,525) | | Net cash provided by investing activities | $10,681 | $13,515 | | Net cash provided by financing activities | $379 | $158 | | Net increase (decrease) in cash | $1,995 | $(1,852) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant customer concentrations, and the company's liquidity outlook for the next twelve months - The company expects its existing cash, cash equivalents, and investments will be sufficient to fund operating expenses and capital expenditure requirements for at least **twelve months** from the financial statement issuance date[39](index=39&type=chunk) - For Q1 2025, **three customers** represented a significant concentration of revenue: Customer A (**17.4%**), Customer B (**15.6%**), and Customer C (**12.3%**), totaling **45.3%** of total revenue[43](index=43&type=chunk) Disaggregated Revenue (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Recurring | $3,969 | $3,743 | | Non-recurring | $3,236 | $1,868 | | **Total Revenue** | **$7,205** | **$5,611** | - As of March 31, 2025, total unrecognized compensation expense was **$3.0 million** for stock options and **$4.5 million** for restricted stock units, expected to be recognized over a weighted average period of **1.1** and **1.3 years**, respectively[92](index=92&type=chunk) - The company has minimum purchase commitments with suppliers of **$1.1 million** for the remainder of 2025, **$1.8 million** for 2026, and **$1.6 million** for 2027[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting 28.4% revenue growth, positive gross margin, and reduced expenses [Overview and Recent Developments](index=27&type=section&id=Overview%20and%20Recent%20Developments) Automated MQC platform provider entered global distribution agreement with MilliporeSigma despite Q1 2025 net loss - In **February 2025**, the company entered into a Distribution and Collaboration Agreement with **MilliporeSigma**, granting it a **global, co-exclusive** right to sell Rapid Micro's products, with MilliporeSigma committed to purchasing a **minimum number** of Growth Direct systems over the **first two years**[120](index=120&type=chunk)[121](index=121&type=chunk) [Key Business Metrics](index=30&type=section&id=Key%20Business%20Metrics) Key business metrics show steady system placements, a significant increase in validated systems, and 6.0% growth in recurring revenue Key Business Metrics Comparison | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Systems placed in period | 3 | 3 | 0.0% | | Cumulative systems placed | 165 | 144 | 14.6% | | Systems validated in period | 9 | 3 | 200.0% | | Cumulative systems validated | 146 | 124 | 17.7% | | Recurring revenue (in thousands) | $3,969 | $3,743 | 6.0% | [Results of Operations Comparison (Q1 2025 vs. Q1 2024)](index=35&type=section&id=Results%20of%20Operations%20Comparison) Total revenue increased by 28.4% to $7.2 million, driven by service revenue growth, while operating expenses decreased by 5.1% - Service revenue increased by **$1.2 million** (**63.5%**) due to more validations, installations, and higher service contract revenue from a larger base of validated systems[169](index=169&type=chunk) - Cost of product revenue decreased by **2.8%** and cost of service revenue decreased by **9.6%**, driven by lower labor and headcount-related costs from cost reduction initiatives[170](index=170&type=chunk) - Sales and marketing expenses decreased by **$0.5 million** (**16.2%**), and R&D expenses decreased by **$0.2 million** (**5.7%**), primarily due to lower headcount-related costs from the **August 2024** cost reduction program[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $42.0 million in cash and investments, deemed sufficient for the next 12 months, with improved operating cash flow Cash and Investment Balances (in thousands) | Asset Type | March 31, 2025 | | :--- | :--- | | Cash and cash equivalents | $18,906 | | Short-term investments | $22,764 | | Restricted cash | $365 | | **Total** | **$42,035** | - Net cash used in operating activities decreased by **$6.5 million** year-over-year, from **$15.5 million** in Q1 2024 to **$9.1 million** in Q1 2025, primarily due to lower personnel-related costs and improved working capital management[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure, primarily from interest rates and inflation, remains unchanged since its 2024 Form 10-K filing - The company's primary market risk exposures are related to fluctuations in **interest rates** and **inflationary pressure**[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The principal executive officer and principal financial officer concluded that as of March 31, 2025, the company's disclosure controls and procedures were **effective** at the **reasonable assurance level**[194](index=194&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have **materially affected**, or are reasonably likely to materially affect, internal controls[195](index=195&type=chunk) Part II [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material litigation or legal proceedings expected to adversely affect its business - The company is **not currently a party** to any **material litigation** or legal proceedings[197](index=197&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including historical losses, platform dependence, supply chain vulnerabilities, and IP challenges [Risks Related to Financial Position and Capital](index=40&type=section&id=Risks%20Related%20to%20Financial%20Position%20and%20Capital) The company has a history of significant losses and may not achieve profitability, facing risks from reliance on its platform and public guidance - The company has incurred **significant losses** since inception, with an accumulated deficit of **$486.5 million** as of March 31, 2025, and may **not achieve or maintain positive cash flow and profitability**[200](index=200&type=chunk) - The company has **failed in the past** and may **fail in the future** to meet **publicly announced guidance**, which could **adversely affect its stock price**[207](index=207&type=chunk)[210](index=210&type=chunk) [Risks Related to Business and Strategy](index=44&type=section&id=Risks%20Related%20to%20Business%20and%20Strategy) Business risks include market position, new product development, cybersecurity, data privacy, AI use, and the complexities of strategic partnerships - The company's business relies on establishing and maintaining its position as a **leader in automated MQC testing**, and it may **not be successful** in expanding with existing customers or driving adoption with new ones[216](index=216&type=chunk)[217](index=217&type=chunk) - The use of AI technologies introduces risks related to **unauthorized data disclosure**, **flawed outputs**, and a **complex, evolving regulatory landscape** that could increase compliance costs and legal liability[268](index=268&type=chunk) - The strategic collaboration with MilliporeSigma carries risks, including **dependence on the distributor's performance**, potential **channel conflicts**, **adverse impacts on margins**, and **challenges in expanding** to new fields and geographies[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Risks Related to Manufacturing and Supply](index=58&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Supply) Manufacturing risks include facility concentration, dependence on single-source suppliers for critical components, and inventory management challenges - The company relies on **single-source suppliers** for certain **critical components** of its Growth Direct system and consumables; for example, the manufacturer of the camera used in the system has **discontinued its production**, requiring the company to manage its existing supply while **qualifying a new supplier**[296](index=296&type=chunk) [Risks Related to Intellectual Property](index=61&type=section&id=Risks%20Related%20to%20Intellectual%20Property) IP risks include limited patent protection, potential government 'march-in rights,' litigation, and technology compromise from open-source software - Patents have a **limited lifespan**; while the company's patent portfolio extends through **2045**, certain earlier U.S. patents are scheduled to expire in **2032**, which could **open the company to competition**[308](index=308&type=chunk) - The **U.S. government** retains certain rights, including potential **'march-in rights,'** to inventions developed with **federal funding** from BARDA, which could **allow the government or third parties to use the technology**[310](index=310&type=chunk) [Risks Related to Common Stock](index=65&type=section&id=Risks%20Related%20to%20Common%20Stock) Common stock risks include price volatility, potential Nasdaq delisting, limited Class A stockholder influence, and reduced disclosure as an 'emerging growth company' - The company has previously received **non-compliance notifications** from Nasdaq for its stock price falling below the **$1.00 minimum bid requirement**; while compliance was regained, there is a **risk of future non-compliance and potential delisting**[329](index=329&type=chunk)[330](index=330&type=chunk) - The company has been and may continue to be subject to actions by **activist stockholders** or **unsolicited acquisition proposals**, which can be **costly, time-consuming, and divert management's attention**[348](index=348&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales or issuer purchases of equity securities occurred, and the IPO proceeds' intended use remains unchanged - There were **no unregistered sales** of equity securities or **purchases** of equity securities by the issuer during the quarter[363](index=363&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted or terminated, though officers entered sell-to-cover arrangements for tax obligations - **No directors or officers** adopted or terminated a **Rule 10b5-1 trading plan** during the quarter ended March 31, 2025[367](index=367&type=chunk) - Company officers have entered into **sell-to-cover arrangements** to authorize pre-arranged sales of shares to satisfy **tax withholding obligations** arising from the vesting of restricted stock units[368](index=368&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications

Financial Data and Key Metrics Changes - Total first quarter revenue increased by 28% to $7.2 million, marking the tenth consecutive quarter of meeting or exceeding guidance [8][14] - Service revenue saw a significant increase of 64% year over year, reaching a quarterly record of $3.1 million [8][15] - First quarter gross margins improved to 6%, a 33 percentage point increase compared to the prior year quarter [9][18] - Net loss for the first quarter was $11.3 million, an improvement from a net loss of $13.3 million in the same quarter last year [19] Business Line Data and Key Metrics Changes - Product revenue, which includes systems and consumables, increased by 10% to $4.1 million [14] - Service revenue growth was driven by higher validation activity and an increase in service contract revenue due to more validated GrowthDirect systems [15][17] - Recurring revenue, consisting of consumables and service contracts, increased by 6% to $4 million [16] Market Data and Key Metrics Changes - Global pharmaceutical and biotech companies are planning investments exceeding $150 billion to expand manufacturing capacities, which positions the company favorably to benefit from this trend [11] - The company is experiencing robust demand for the GrowthDirect system, with multiple customers recognizing its value proposition [10] Company Strategy and Development Direction - The collaboration with MilliporeSigma includes global co-exclusive rights to sell the GrowthDirect system and aims to improve gross margins and product costs [12] - The company is focused on expanding its sales funnel and improving manufacturing efficiencies to drive margin improvement [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while the business environment is incrementally more uncertain, key projects are being prioritized, which includes the GrowthDirect system [29] - The company does not expect a material impact from tariffs on its 2025 results, thanks to proactive supply chain strategies [20][32] Other Important Information - The company expects to burn approximately $30 million in cash for the full year 2025, which is a reduction compared to the previous year [25] - The company reaffirmed its full year 2025 total revenue guidance of at least $32 million [21] Q&A Session Summary Question: How is the business environment and customer interest in GrowthDirect? - Management indicated that key projects are being prioritized, and there is confidence in the demand for GrowthDirect despite a more uncertain environment [29] Question: What is the outlook for gross margins given tariff pressures? - Management expects the exit rate for gross margins to be higher than previously guided, with no significant impact from tariffs anticipated [38] Question: How many validations are expected this year compared to last year? - The company expects to complete at least 18 validations this year, slightly up from 16 validations last year [42] Question: What is the nature of the recent capital expenditures in the U.S.? - Management noted that the capital expenditures may signify a focused effort in the U.S., which the company plans to benefit from [46] Question: How is AI integrated into the company's long-term strategy? - The company is actively working on software advancements that include AI as part of its R&D roadmap [49]

Financial Data and Key Metrics Changes - Total first quarter revenue increased by 28% to $7.2 million, marking the tenth consecutive quarter of meeting or exceeding guidance [8][14] - Service revenue saw a significant increase of 64% year over year, reaching a quarterly record of $3.1 million [8][15] - First quarter gross margins improved to 6%, a 33 percentage point increase compared to the prior year quarter [9][18] - Net loss for the first quarter was $11.3 million, an improvement from a net loss of $13.3 million in the same quarter last year [19] Business Line Data and Key Metrics Changes - Product revenue, which includes systems and consumables, increased by 10% to $4.1 million compared to $3.7 million in Q1 2024 [14][15] - Service revenue growth was driven by higher validation activity and increased service contract revenue due to more validated GrowthDirect systems [15][17] - Recurring revenue, consisting of consumables and service contracts, increased by 6% to $4 million [16] Market Data and Key Metrics Changes - Global pharmaceutical and biotech companies are planning investments exceeding $150 billion to expand manufacturing capacities, which is expected to benefit the company [11] - The company is well-positioned to take advantage of the trend towards new construction incorporating the latest technologies [11] Company Strategy and Development Direction - The collaboration with MilliporeSigma includes global co-exclusive rights to sell the GrowthDirect system and aims to improve gross margins and product costs [12][54] - The company is focused on accelerating GrowthDirect system placements and developing innovative products [12][13] Management's Comments on Operating Environment and Future Outlook - Management noted that while the business environment is incrementally more uncertain, key projects are being prioritized, which includes the GrowthDirect system [29] - The company expects to reaffirm its full-year 2025 total revenue guidance of at least $32 million, with system placements between 21 and 25 [21][24] Other Important Information - The company ended the first quarter with approximately $42 million in cash [19] - Operating expenses decreased by 5% to $12.1 million, largely due to operational efficiency programs [18] Q&A Session Summary Question: How is the business environment affecting prospects? - Management indicated that key projects are being prioritized, and the GrowthDirect system is part of that, providing confidence despite increased uncertainty [29] Question: What is the outlook for gross margins given tariff pressures? - Management expects the exit rate for gross margins to be higher than previously guided, with no significant impact from tariffs anticipated [38] Question: How many validations are expected this year compared to last year? - The company expects to complete at least 18 validations this year, slightly up from 16 last year, with potential for upside [42] Question: What is the significance of the recent CapEx in the U.S.? - Management noted that ongoing expansions by customers signify a focus on new projects, which typically adopt newer technology, benefiting the company [46] Question: How is AI integrated into the long-term strategy? - AI advancements are part of the R&D roadmap, with a focus on managing digital data generated by the GrowthDirect system [49] Question: How does the MilliporeSigma deal impact tariff exposure? - Management stated that while there is incremental uncertainty due to tariffs, there is no direct impact expected from the MilliporeSigma collaboration [51]

Financial Data and Key Metrics Changes - Total first quarter revenue increased by 28% to $7,200,000, marking the tenth consecutive quarter of meeting or exceeding guidance [6][12] - Service revenue saw a significant increase of 64% year over year, reaching a quarterly record of $3,100,000 [6][13] - First quarter gross margins improved to 6%, a 33 percentage point increase compared to the prior year quarter [7][15] - Net loss for the first quarter was $11,300,000, compared to a net loss of $13,300,000 in the same quarter last year [17] Business Line Data and Key Metrics Changes - Product revenue, which includes systems and consumables, increased by 10% to $4,100,000 [12] - Service revenue growth was driven by higher validation activity and an increase in service contract revenue [13] - Recurring revenue, consisting of consumables and service contracts, increased by 6% to $4,000,000 [13] Market Data and Key Metrics Changes - Global pharmaceutical and biotech companies are planning investments exceeding $150 billion to expand manufacturing capacities, which is expected to benefit the company [9] - The company is well positioned to take advantage of the trend of new construction incorporating the latest technologies [9] Company Strategy and Development Direction - The collaboration with MilliporeSigma includes global co-exclusive rights to sell the GrowthDirect system and aims to improve gross margins and product costs [10][11] - The company is focused on expanding its customer base and enhancing its product offerings through strategic partnerships [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while the business environment is incrementally more uncertain, key projects are being prioritized by customers, which gives confidence in future orders [26] - The company expects to reaffirm its full year 2025 total revenue guidance of at least $32,000,000 [19] Other Important Information - The company ended the first quarter with approximately $42,000,000 in cash [17] - Operating expenses decreased by 5% to $12,100,000, largely due to operational efficiency programs [16] Q&A Session Summary Question: How is the business environment affecting prospects? - Management indicated that key projects are being prioritized, and there is confidence in the demand for GrowthDirect despite some uncertainty in the market [26] Question: What is the outlook for gross margins given tariff pressures? - Management expects the exit rate for margins to be higher than previously guided, with no significant impact from tariffs anticipated [34] Question: How many validations are expected this year compared to last year? - The company expects to complete at least 18 validations this year, slightly up from 16 last year, with potential for upside [38] Question: What is the significance of the recent CapEx in the U.S.? - Management noted that ongoing expansions by customers in the U.S. are seen as positive, as new projects typically adopt newer technology [40] Question: How is AI integrated into the company's long-term strategy? - The company is focusing on software advancements, including AI, as part of its R&D roadmap to enhance data management capabilities [43]

Company Performance - Rapid Micro Biosystems reported a quarterly loss of $0.26 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.27, and an improvement from a loss of $0.31 per share a year ago, representing an earnings surprise of 3.70% [1] - The company posted revenues of $7.21 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 9.17%, and showing a year-over-year increase from $5.61 million [2] - Over the last four quarters, Rapid Micro Biosystems has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - Rapid Micro Biosystems shares have increased approximately 172.2% since the beginning of the year, contrasting with the S&P 500's decline of -3.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.26 on revenues of $7.85 million, and for the current fiscal year, it is -$0.99 on revenues of $33.1 million [7] Industry Outlook - The Medical - Instruments industry, to which Rapid Micro Biosystems belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Rapid Micro Biosystems reported strong financial performance for the first quarter of 2025, highlighted by a 28% increase in total revenue and a significant 33-percentage point improvement in gross margin compared to the prior-year period. The company also announced a key global distribution and collaboration agreement with MilliporeSigma and reaffirmed its full-year 2025 revenue guidance Q1 2025 Key Performance Indicators | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $7.2 million | +28% | | Gross Margin | 6% | +33 percentage points | - Service revenue reached a record high, driven by strong validation activity for customer systems[3](index=3&type=chunk)[9](index=9&type=chunk) - Announced a global Distribution and Collaboration Agreement with MilliporeSigma to help accelerate Growth Direct system placements and improve gross margins[3](index=3&type=chunk)[9](index=9&type=chunk) - Full-year 2025 total revenue guidance of at least **$32.0 million** is reaffirmed[8](index=8&type=chunk)[9](index=9&type=chunk) [First Quarter Financial Results Analysis](index=1&type=section&id=First%20Quarter%20Financial%20Results%20Analysis) In Q1 2025, total revenue grew 28% to $7.2 million, primarily fueled by a 64% surge in service revenue. Gross margin turned positive at 6%, a substantial improvement from negative 27% in Q1 2024, due to lower cost of revenue. Operating expenses saw a 5% reduction, contributing to a smaller net loss of $11.3 million, or $0.26 per share. The company maintained a healthy liquidity position with approximately $42 million in cash and investments and no debt Q1 2025 vs. Q1 2024 Revenue Breakdown (in millions) | Revenue Type | Q1 2025 | Q1 2024 | Growth | | :--- | :--- | :--- | :--- | | Product Revenue | $4.1 | $3.7 | +10% | | Service Revenue | $3.1 | $1.9 | +64% | | **Total Revenue** | **$7.2** | **$5.6** | **+28%** | | Recurring Revenue | $4.0 | $3.7 | +6% | - The company placed three new Growth Direct® systems and completed nine customer system validations, compared to three placements and three validations in Q1 2024[4](index=4&type=chunk) Q1 2025 vs. Q1 2024 Profitability (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit (Margin) | $0.4 (6%) | -$1.5 (-27%) | | Total Operating Expenses | $12.1 | $12.8 | | Net Loss | $11.3 | $13.3 | | Net Loss Per Share | $0.26 | $0.31 | - As of March 31, 2025, the company had approximately **$42 million** in cash, cash equivalents, and short-term investments, with no debt outstanding[7](index=7&type=chunk) [2025 Outlook](index=1&type=section&id=2025%20Outlook) The company has reaffirmed its full-year 2025 financial guidance, signaling confidence in its operational strategy and market position for the remainder of the year Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Total Revenue | At least $32.0 million | | System Placements | Between 21 and 25 | [Financial Statements](index=5&type=section&id=Financial%20Statements) The financial statements provide a detailed overview of the company's financial position and performance for the period [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations for the three months ended March 31, 2025, shows a 28% increase in total revenue to $7.2 million and a reduced net loss of $11.3 million compared to a $13.3 million loss in the prior-year period, reflecting improved gross margins and controlled operating expenses Q1 2025 Statement of Operations (in thousands, except per share data) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | **2025** | **2024** | | **Revenue:** | | | | Product revenue | $4,101 | $3,713 | | Service revenue | $3,104 | $1,898 | | **Total revenue** | **$7,205** | **$5,611** | | **Costs and operating expenses:** | | | | Cost of product revenue | $5,029 | $5,173 | | Cost of service revenue | $1,772 | $1,961 | | Research and development | $3,624 | $3,842 | | Sales and marketing | $2,751 | $3,281 | | General and administrative | $5,690 | $5,627 | | **Total costs and operating expenses** | **$18,866** | **$19,884** | | **Loss from operations** | **($11,661)** | **($14,273)** | | Interest income, net | $466 | $983 | | **Net loss** | **($11,263)** | **($13,322)** | | **Net loss per share — basic and diluted** | **($0.26)** | **($0.31)** | [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the company's balance sheet shows total assets of $85.4 million and total liabilities of $19.9 million. This compares to total assets of $98.2 million and total liabilities of $22.8 million at the end of 2024, with the decrease in assets primarily driven by a reduction in short-term investments Balance Sheet Highlights (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :---: | :---: | | **Assets** | | | | Cash and cash equivalents | $18,906 | $16,911 | | Short-term investments | $22,764 | $33,821 | | Total current assets | $69,182 | $80,917 | | **Total assets** | **$85,434** | **$98,169** | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $14,996 | $17,565 | | **Total liabilities** | **$19,943** | **$22,817** | | **Total stockholders' equity** | **$65,491** | **$75,352** | [Unaudited Cash, Cash Equivalents and Investments](index=6&type=section&id=Unaudited%20Cash%2C%20Cash%20Equivalents%20and%20Investments) The company's total cash, cash equivalents, and investments stood at $41.7 million as of March 31, 2025, a decrease from $50.7 million at the end of 2024 Cash Position (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Cash and cash equivalents | $18,906 | $16,911 | | Short-term investments | $22,764 | $33,821 | | **Cash, cash equivalents and investments** | **$41,670** | **$50,732** | [Other Information](index=3&type=section&id=Other%20Information) This section provides details on the investor conference call, a corporate overview of Rapid Micro Biosystems' business in automating microbial quality control (MQC), and the standard forward-looking statements disclaimer outlining potential risks and uncertainties - The company will host a conference call on May 9, 2025, at 8:30 a.m. ET to discuss the quarterly results[10](index=10&type=chunk) - Rapid Micro Biosystems provides automation solutions, including its flagship Growth Direct system, to modernize manual microbial quality control (MQC) testing for pharmaceutical manufacturing[11](index=11&type=chunk) - The press release contains forward-looking statements concerning financial guidance, the MilliporeSigma collaboration, and operational improvements, which are subject to risks and uncertainties detailed in SEC filings[13](index=13&type=chunk)[14](index=14&type=chunk)

Core Insights - Rapid Micro Biosystems reported a strong revenue growth of 28% in Q1 2025, reaching $7.2 million compared to $5.6 million in Q1 2024, with record quarterly service revenue [2][3][8] - The company is focused on product cost reduction, manufacturing efficiency, and service productivity, which contributed to significant gross margin expansion from negative 27% in Q1 2024 to positive 6% in Q1 2025 [2][4][8] - A global Distribution and Collaboration Agreement with MilliporeSigma is expected to enhance system placements and improve gross margins [2][8] Financial Performance - Total revenue for Q1 2025 was $7.2 million, a 28% increase from $5.6 million in Q1 2024 [3][8] - Product revenue increased by 10% to $4.1 million, while service revenue surged by 64% to $3.1 million compared to the previous year [3][8] - Recurring revenue rose by 6% to $4.0 million [3] Cost and Expenses - Total cost of revenue decreased by 5% to $6.8 million in Q1 2025 from $7.1 million in Q1 2024 [4] - Total operating expenses also decreased by 5% to $12.1 million, with notable reductions in research and development expenses by 6% and sales and marketing expenses by 16% [5] Net Loss and Cash Position - The net loss for Q1 2025 was $11.3 million, an improvement from a net loss of $13.3 million in Q1 2024, with net loss per share decreasing from $0.31 to $0.26 [6][8] - As of March 31, 2025, the company had approximately $42 million in cash, cash equivalents, and short-term investments, with no outstanding debt [6][8] 2025 Outlook - The company reaffirmed its full-year 2025 total revenue guidance of at least $32.0 million, anticipating between 21 and 25 system placements [7][8]

Company Overview - Rapid Micro Biosystems, Inc. is an innovative life sciences technology company focused on providing automation solutions for the efficient manufacturing and safe release of healthcare products [3] - The company specializes in products such as biologics, vaccines, cell and gene therapies, and sterile injectables [3] - The flagship product, Growth Direct system, modernizes microbial quality control testing workflows in pharmaceutical manufacturing [3] Financial Results Announcement - The company will release its first quarter 2025 financial results on May 9, 2025, prior to market opening [1] - A webcast conference call will be hosted by the management team at 8:30 a.m. ET on the same day [2] - The live audio webcast will be available on the company's website and will be archived for replay [2] Operational Efficiency - The Growth Direct system automates quality control processes, leading to faster results, greater accuracy, and increased operational efficiency [3] - The system enhances compliance with data integrity regulations and supports quicker decision-making for healthcare product supply [3] - The company is headquartered in Lexington, Massachusetts, with manufacturing in Lowell, Massachusetts, and global locations in Switzerland, Germany, and the Netherlands [3]

Core Points - Rapid Micro Biosystems, Inc. announced the grant of equity awards to new employees as part of its Inducement Plan, including 50,000 restricted stock units (RSUs) and 250,000 stock options [1][4] - The stock options have an exercise price of $2.27 per share, with a vesting schedule that includes 25% vesting on the first anniversary and monthly vesting thereafter [2] - The RSUs will vest annually over a three-year period, with one-third vesting on each anniversary of their grant dates [3] Company Overview - Rapid Micro Biosystems is a life sciences technology company that provides automation solutions for the manufacturing and release of healthcare products, including biologics, vaccines, and sterile injectables [5] - The company's flagship product, the Growth Direct system, modernizes microbial quality control testing workflows in pharmaceutical manufacturing, enhancing efficiency, accuracy, and compliance [5] - The company is headquartered in Lexington, Massachusetts, with manufacturing in Lowell, Massachusetts, and additional locations in Switzerland, Germany, and the Netherlands [5]

Growth Direct Platform - The Growth Direct platform automates and modernizes microbial quality control (MQC) testing workflows, delivering results in half the time or less compared to traditional methods[24]. - The Growth Direct system has been installed in 162 locations globally, with over 6 million consumables sold, serving 70% of the top twenty largest pharmaceutical companies by revenue[31]. - The Growth Direct method reduces manual steps by up to 85%, generating substantial time and cost savings for customers[45]. - The Growth Direct platform is the only fully automated, high-throughput MQC solution, developed with over 15 years of customer feedback[25]. - The Growth Direct platform is expected to drive substantial growth in the biologics and cell and gene therapy markets, which have the highest MQC testing intensity per batch[43]. - The Growth Direct system enables time to organism detection in as little as 12 hours and final time-to-result in one to three days, significantly improving the speed of sterility testing compared to traditional methods that take at least 14 days[58]. - The Growth Direct platform automates microbiology quality control (MQC) testing, reducing manual steps by 85% and accelerating time to results by 50% or more[70]. - The system has a high throughput capacity, processing up to 700 samples simultaneously, which enhances operational efficiency for manufacturers[69]. - The Growth Direct platform integrates with existing Laboratory Information Management Systems (LIMS), enabling a fully paperless workflow and improving data integrity and security[60]. - The Growth Direct platform has been adopted by 46 global customers across 98 manufacturing facilities since its launch in 2017[75]. - The company aims to expand the Growth Direct platform's implementation within existing customers, targeting 70% of the top twenty global pharmaceutical companies[76]. Market Potential and Strategy - The total addressable market for MQC testing is estimated at approximately $5.0 billion for system sales and another $5.0 billion for annual recurring sales of consumables and services[42]. - The MQC market is expected to grow due to increasing regulatory scrutiny and the demand for complex therapeutic modalities like biologics and cell and gene therapies[43]. - The company aims to establish Growth Direct as the global standard in automated MQC, focusing on speed, accuracy, security, and regulatory compliance[32]. - The company has a scalable commercial infrastructure with direct sales teams in North America, Europe, and Asia-Pacific, ensuring successful onboarding and support for customers[30]. - The company intends to pursue strategic investments, partnerships, and acquisitions to enhance its growth profile[79]. - The company expects a significant portion of its revenue to be generated from a small number of customers each year, relying on multi-system deals and consumables[124]. - The company aims to broaden the application of its automated MQC testing to capture a greater share of the value chain in drug manufacturing[129]. Financial Performance - Positive gross margins were achieved for the first time in the company's history in Q3 and Q4 of 2024[83]. - The company's gross margins improved from (24)% for the twelve months ended December 31, 2023 to (0.4)% for the twelve months ended December 31, 2024, indicating a positive trend[115]. - For the years ended December 31, 2024 and 2023, the company incurred net losses of $46.9 million and $52.5 million, respectively, with an accumulated deficit of $475.3 million as of December 31, 2024[109]. - The company has financed its operations primarily through private placements of equity, debt, and its initial public offering, with revenue derived from its Growth Direct platform being a lesser extent[109]. - The company may need to raise additional capital through equity offerings or debt financing, which could dilute existing shareholders' interests[126]. - The company faces significant risks related to its financial position, including the potential for continued losses and the need to generate significant additional revenue to achieve profitability[109]. Operational Efficiency and Challenges - The company implemented an Operational Efficiency Program in July 2024, which included workforce reductions and cost-saving measures, aiming to achieve positive cash flow without additional financing[109]. - The Operational Efficiency Program was implemented in July 2024, aiming for positive cash flow by the end of 2027 without additional financing[145]. - The company anticipates that the Operational Efficiency Program may not yield the expected cost savings, potentially leading to greater total costs and expenses[146]. - Future operational results may lag expectations, prompting additional workforce reductions or restructuring activities[147]. - The company faces challenges in managing future growth effectively, requiring significant hiring and training of specialized personnel[148]. Intellectual Property and Compliance - The company has a strong intellectual property portfolio with at least 80 granted and pending patents globally, supporting its competitive advantage in automated MQC testing[71]. - The company has 10 granted unexpired patents in the United States and 53 issued patents in foreign jurisdictions as of December 31, 2024[91]. - Intellectual property protection is crucial for the company's technology, and failure to maintain this protection could impair competitive advantage[215]. - The company may face challenges in obtaining and maintaining sufficient intellectual property protection, which could hinder commercialization efforts[216]. - The U.S. government retains certain rights in inventions developed with federal funding, which may include march-in rights affecting patent rights and technology developed from such patents[221]. - The company relies on trade secrets and confidentiality agreements to protect its proprietary information, with an increasing reliance expected as early patents expire[222]. Risks and Competition - The company faces competition from both established manufacturers and smaller companies in the pharmaceutical manufacturing industry[92]. - Competition in the automated MQC testing market is growing, and the company may struggle to maintain its leading position[154]. - The company faces intense competition for hiring qualified personnel, which could impact its ability to execute business strategies effectively[165]. - The company is highly dependent on key management personnel, and the loss of any could delay sales and expansion efforts[164]. - The company faces risks related to inventory management and the potential for excess inventory that may become obsolete[138]. - The company is exposed to significant uninsured liabilities due to the limitations of its insurance policies, which may impact financial stability[191]. Regulatory and Compliance Issues - The company is subject to various U.S. and international data privacy laws, including the California Consumer Privacy Act (CCPA) and the EU General Data Protection Regulation (GDPR), which impose strict compliance requirements[172][176]. - The evolving regulatory environment regarding data privacy may lead to increased compliance costs and operational challenges[177]. - The company has experienced increased scrutiny and restrictions on personal data transfers, particularly concerning sensitive data categories[178]. - The company’s Growth Direct platform is designed to integrate into compliant quality-control workflows, but it is not directly regulated by the FDA[137]. Supply Chain and Manufacturing - Manufacturing operations are dependent on third-party suppliers, including single-source suppliers, making the company vulnerable to supply shortages and price fluctuations[205]. - The company has experienced supply chain disruptions due to the coronavirus pandemic, which may continue to affect operations[206]. - Critical components for the Growth Direct system are sourced from single suppliers, and any loss of supply could materially impact the business[207]. - The company relies on forecasts to manage inventory needs, and inaccuracies in these forecasts could lead to delays or increased costs[210]. - Shipping arrangements are critical, and any changes or damages during shipping could adversely affect financial results and customer satisfaction[211]. Employee Engagement and Diversity - Membership in the company's Women's Employee Resource Group grew by approximately 48% in 2024, reflecting a commitment to diversity and employee engagement[104]. - The company has a high customer satisfaction rate, with over 40% of customers deploying Growth Direct systems across multiple facility locations[77].