Rapid Micro Biosystems, Inc.

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. 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 Pollier of Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining the Rapid Microbio Systems first quarter 2024 earnings call. Joining me on the call are Rob Spignessi, President and Chief Executive Officer, and Sean Wurchis, 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. 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 condition, 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, 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 Micro's 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 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. 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. And with that, I'll now turn the call over to Rob.

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. 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 quarter in a row that our revenue exceeded guidance. We placed three growth direct systems in the 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. This strength in consumables demonstrates that customers are actively using their growth direct systems and are realizing value across their global manufacturing networks. 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. 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 networks. The many benefits of the Growth Direct's full automation include enhanced data integrity, improved accuracy, reduced human error, and lower hands-on labor costs. In addition, the Growth Direct offers operational efficiencies which can enable faster product release, less waste, and reduced inventories. Moreover, given the clear demand in the industry for increased manufacturing capacity, the 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 is accelerating the adoption of automation. As customers implement automation across their manufacturing networks, we are confident that the 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 improvements. 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 Sterility. Since our announcement earlier this year, customer interest for 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 and into manufacturing with the associated scale-up activities. In June, we are hosting customers at our Lexington Innovation Center and Demonstration Lab for a live, hands-on experience with the GrowthDirect Rapid Serility Platform. 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 totally controlling operating expenses, capital expenditures, and working capital. 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 directed providing a strong value proposition by delivering full automation, operational efficiencies, and improved data integrity. customers continue to plan further deployment of growth-direct systems across their global manufacturing networks. 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. 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 workflows. an attractive high-growth business model with durable recurring revenue. 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. 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?