RPID

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Good day, and thank you for standing by. Welcome to the Rapid Micro Biosystems first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Beaulieu, investor relations. Please go ahead.

Thank you, Shannon. Good afternoon, and thank you for joining the Rapid Micro Biosystems first quarter earnings call. We apologize for the delay as we were experiencing some technical difficulties on our end. Joining me on the call are Rob Spignesi, President and Chief Executive Officer, and Sean Wirtjes, Chief Financial Officer. This afternoon, we issued a press release announcing our first quarter 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, assumptions regarding future financial performance, anticipated future cash usage, statements related to the company's term loan facility, guidance for the second quarter and full year 2026, including revenue, expenses, gross margins, system placements and validation activities, expectations for and plan activities related to Rapid Micro's business development and growth, including the expected benefits from our distribution and collaboration agreement with MilliporeSigma, customer interest and adoption of the Growth Direct System and the impact of the Growth Direct System on their businesses and operations, and statements regarding the potential impact of general macroeconomic conditions on our business and that of our customers.

Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including our ability to meet publicly announced guidance, the impact of our existing and any future indebtedness on our ability to operate our business, our ability to assess any future tranches under our debt facility and to comply with all its obligations thereunder, our ability to deliver products to customers and recognize revenue, and market and macroeconomic conditions.

For a more detailed list and description of the risks and uncertainties associated with Rapid Micro's business, please refer to the Risk Factors section of our most recent quarterly report on Form 10-Q 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 13, 2026. 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. With that, I'll turn the call over to Rob.

Thank you, Mike. Good afternoon, everyone. I'll begin today's call with a brief overview of our first quarter performance, then discuss our priorities for the year before turning the call over to Sean for a more detailed review of our first quarter results and our Q2 and full year 2026 outlooks. Today, we reported total revenue of $8 million, representing 11% year-over-year growth, driven by continued momentum across system placements and recurring revenue. During the quarter, we placed 6 Growth Direct Systems, as of March 31st, we had 196 systems placed globally, including 160 fully validated systems. Placement activity in the quarter was led by multi-system follow-on order from Samsung Biologics, highlighting continued success with larger key customers.

Product revenue increased 36% in the first quarter, driven by a record quarter for consumables, which grew more than 30%, reflecting increased utilization in a growing installed base. Service revenue was in line with the guidance we provided in March. Recurring revenue increased 28%, driven by strong growth across both consumables and service contract revenue, and represented 63% of total revenue in the quarter. First quarter gross margin was 5%, consistent with our guidance, representing an 8 percentage point improvement from the fourth quarter of 2025. With that overview, I'll now turn to our priorities and review our progress thus far in 2026, starting with accelerating Growth Direct System placements. We're off to a solid start in 2026. Our commercial team is expanding the funnel with continued momentum in multi-system opportunities and strong engagement, including global rollout discussions with large customers.

In early April, we hosted a Japan Growth Direct Day event in Tokyo that brought together current users and prospective customers, the first of three regional Growth Direct Day customer events planned for 2026. The program enabled robust peer-to-peer discussions regarding implementation and validation and highlighted the operational benefits of automating and standardizing microbial QC on the Growth Direct platform. Following Japan, I visited South Korea and met with customers to discuss their QC automation roadmaps. Across these conversations, we discussed a clear intent in scaling Growth Direct deployments as customers accelerate their plans to adopt automation and enterprise-wide standardization in microbial QC. The Asia-Pacific region is an important growth driver for Rapid Micro as we work to accelerate system placements and deepen relationships with large biopharma manufacturers.

The engagement we're building in the region positions us well to become a long-term technology partner as the imperative to automate continues to broaden. We're also expanding our installed base across the region with system placements in markets such as Singapore and Australia. In addition, we placed our first Growth Direct System in China, where investment in advanced therapies, including cell and gene therapies, continues to increase, and regulatory pathways are evolving to support accelerated review. Overall, our activities in Asia-Pacific are strengthening customer relationships, building reference sites, and supporting continued acceleration of system placements over time. Looking ahead, in June, Amgen will sponsor our first North American Growth Direct Day. We expect the event to bring together existing and prospective customers and further support momentum in our core biopharma market. I look forward to providing an update on our second quarter earnings call.

In addition to our direct commercial channel, our collaboration with MilliporeSigma continues to expand the opportunity for Growth Direct placements, not only in our core pharmaceutical market, but also adjacent markets such as personal care and medical devices. MilliporeSigma is prioritizing automation and digital technologies to help shape the future of the pharma QC lab. This effort centers on improving productivity, reliability, and data integrity. These are areas where the Growth Direct excels and delivers clear customer value. The Growth Direct platform complements MilliporeSigma's product portfolio, and we are pleased to be included within this broader automation framework.

We also entered into a services agreement with MilliporeSigma that makes Rapid Micro the exclusive provider of validation, qualification, and maintenance services to their customers that purchase Growth Direct systems. In parallel, we are progressing toward a supply agreement as part of our margin expansion initiatives and continue to collaborate on joint new product development opportunities and enhancements to existing products. Turning to our priority of expanding gross margins, our performance in 2026 continues to track in line with our expectations and within the framework we've previously outlined. Our primary driver for our full year 2026 gross margin guidance of approximately 20% is a meaningful improvement of consumable margins. We have already begun to realize more favorable pricing from several key suppliers, which is lowering our cost structure and meaningfully improving our visibility.

Combined with additional actions underway to improve systems manufacturing efficiency, this gives us confidence in an inflection to positive product gross margins beginning in the second quarter. Service margins, where we are currently meaningfully positive, are also expected to accelerate further in the second half of 2026 as revenue ramps, supporting our outlook for an overall gross margin rate in the fourth quarter in the mid 20% range. Looking further out, we remain focused on our long-term goal of 50%-plus gross margins, supported by internal initiatives in our work with MilliporeSigma to reduce costs across systems and consumables. These efforts include manufacturing efficiencies, improved sourcing and supply chain optimization, and overhead leverage as volumes scale. Service margins are expected to continue improving through productivity gains and improved headcount leverage across a growing installed base.

To conclude my remarks, customer demand remains strong, with purchasing decisions increasingly strategic in nature and, in many cases, focused on the Growth Direct as an enterprise priority. Our direct commercial organization is executing well, and our collaboration with MilliporeSigma continues to advance. Supported by favorable industry tailwinds, including increased automation, U.S. reshoring initiatives, and the growing complexity of advanced biomanufacturing, these dynamics are enhancing our visibility into our longer-term commercial pipeline extending into 2027 and 2028. Based on our first quarter performance and outlook, we are reaffirming our full year 2026 revenue guidance of $37 million-$41 million, including 30 to 38 system placements. With that, I'll turn the call over to Sean to discuss our first quarter performance and 2026 outlook in more detail. Sean?

Thanks, Rob, and good afternoon, everyone. I'll begin with an overview of our first quarter 2026 results, followed by our outlook for the second quarter and full year. We will then open the call for questions. Total revenue for the first quarter increased 11% to $8 million, compared to $7.2 million in the prior year period. We placed 6 Growth Direct systems in the quarter, compared to 3 in Q1 2025. Product revenue, which includes systems and consumables, increased 36% to $5.6 million, compared to $4.1 million in Q1 2025. The increase was driven by strong consumable growth of more than 30% and higher system placements. Service revenue was $2.4 million compared to $3.1 million in Q1 2025. This was within the guidance range we provided in March.

As a reminder, the timing of validation activities is typically the largest driver of quarter-to-quarter variability in service revenue. We completed five validations in the first quarter, compared to nine in the prior year period. Recurring revenue increased 28% to $5.1 million, compared to $4 million in Q1 2025. Non-recurring revenue, which is primarily comprised of systems and validation revenue, was $2.9 million, compared to $3.2 million in the prior year period. Turning to margin, total first quarter gross margin and gross margin percentage were relatively flat compared to Q1 last year at $0.4 million and 5% respectively. This was in line with our guidance. Within this, Q1 product margin was negative 8% compared to negative 23% in Q1 last year.

The 15 percentage point improvement was mainly driven by a 33 percentage point improvement in consumable margins, resulting mainly from direct material cost reduction activities, increased manufacturing productivity and efficiency, and operating leverage from higher volumes. Q1 service margin was 34% in the first quarter, compared to 43% in Q1 last year. The lower service margin was due to the lower service revenue in the period, which is partially offset by the positive impact of productivity improvements made over the past year. Moving down the P&L, total operating expenses were $14.2 million in the first quarter, compared to $12.1 million in Q1 2025.

Within OpEx, R&D expenses were $3.4 million, sales and marketing expenses were $3.4 million, and G&A expenses were $7.4 million, which included $0.9 million of severance and other non-recurring corporate expenses. Interest income was $0.3 million, and interest expense was $0.6 million in the first quarter. Q1 net loss was $14.3 million. This compares to a net loss of $11.3 million in Q1 last year. The larger net loss in Q1 this year was primarily attributable to the non-recurring G&A costs I just mentioned, as well as interest expense on the debt we issued in Q3 last year, lower interest income, and higher non-cash stock-based compensation expense.

In Q2, we expect net loss to step down and be comparable to the second quarter last year, and then show progressive improvement in Q3 and Q4 compared to the comparable periods last year. Net loss per share was $0.31 in Q1, compared to net loss per share of $0.26 in the prior year quarter. With respect to non-cash expenses and capital expenditures, depreciation and amortization expenses were $0.7 million. Stock compensation expense was $1.2 million, and capital expenditures were $0.4 million in the first quarter. I'll turn to our outlook for the second quarter and full year. For the full year 2026, we are reaffirming our total revenue guidance of $37 million-$41 million, which assumes 30-38 system placements.

For Q2, we expect revenue of at least $7.7 million, which includes at least 4 system placements. We continue to expect to complete at least 25 validations in 2026. Turning to margins, we expect our Q2 gross margin as a percentage of revenue to be in the mid to high teens. For the full year, we continue to expect total gross margins of approximately 20%, with a Q4 exit rate in the mid 20% range or better, product margin in the high single digits to low teens, and service margin above 40%. We continue to expect quarter-to-quarter variability in gross margin to be driven by progress on our product cost reduction and service productivity initiatives, overall revenue volumes, and the revenue mix between systems, consumables, and service in each period.

Continuing down the P&L, for the full year, we now expect operating expenses of between $48 million and $52 million and $8 million in non-cash expenses, including depreciation and amortization expense of $3 million and stock compensation expense of $5 million, $7 million of non-cash expenses in OpEx and $1 million in cost of revenue. We also expect CapEx of $2 million, interest income of $1 million, and interest expense of $2 million for the full year. I'll now turn to our balance sheet. We used $15 million of cash in the first quarter and ended the period with $23 million. Q1 is typically our highest cash use quarter due to seasonal revenue and margin patterns and certain annual payments. This year, Q1 cash usage also reflects 2 notable timing items.

First, Q1 cash collections were lower than usual due to stronger collections in Q4 2025, including the receipt of 100% of the cash associated with our record 16 system placements, which helped reduce Q4 cash usage to $3 million. Second, the previously mentioned $0.9 million of severance and other non-recurring corporate expenses included in our G&A expense. For the balance of 2026, we expect cash usage to decline sequentially each quarter as revenue increases, margins continue to expand, and operating expenses step down to levels generally consistent with the comparable quarterly periods in 2025. We also expect lower cash usage to be supported by disciplined management of CapEx and working capital.

With our $23 million in existing cash and $25 million of remaining availability under our Trinity Capital credit facility, we are well-positioned to execute our strategy and will continue to actively and prudently manage our balance sheet. That concludes my comments. At this point, we'll open the call up for questions. Operator?

Thank you. As a reminder to ask a question, please press one one of your telephone and wish for your name to be announced. To withdraw your question, please press star one one again. Pease stand by while we power the Q&A roster. Our first question comes from the line of Paul Knight with KeyBank. Your line is now open.

Hi, Rob. Can you talk to the Millipore, JV expansion by what more services? Could you help us understand what that is all about?

Paul. Basically, that agreement is linked to Growth Directs that MilliporeSigma sells, that we will be the provider of all services associated: installation, qualification, all the way through routine use services. The takeaway is that service revenue would be recorded by us. The best way to think about it is no matter where a Growth Direct is sold in the world, we will perform all the installation qualification services, whether it's through our direct channel or through the MilliporeSigma channel.

Then the scale on consumables, is it you need more volume of consumables or is it some technical issue that they're getting solved on the Millipore side?

Margin.

Yeah, in terms of margin improvement opportunity, Paul?

Yeah.

Yeah, I think, it's a little bit of both. I think there's clearly opportunity for us to work with them and source from them over time. That's the expectation that we have. We do not source anything from them for our consumables right now, and they make some of the largest components of the products. That's a very large opportunity for us. You know, they have expertise in that product as well. You know, part of the deal with them on distribution is that they're gonna increase the volume and the growth. I think all of that fits together into a nice package for us that we expect is gonna help drive margin improvement going forward.

As I touched on in my remarks, Paul, we're collaborating with them now on what that, what that could look like, with regard to that purchasing to drive gross margin improvement separately. The team has done a nice job with our current supply base to make sure we've got the right leverage, which, you know, we've given a forward view for the full year on margin, so that was incorporated. Of course, we have quite a bit of operating leverage in our business, whether it's consumables or systems manufacturing, given our fixed cost leverage in the business. All that is colluding to come together to present our gross margin outlook, which Sean walked through.

Okay. Lastly, Sean, the Trinity line of credit remaining or available of $25 million, what are the terms on that?

Yeah. Which terms are specifically interested in, Paul? I'm happy to kind of walk through the things that'll be helpful.

You mentioned $25 million line of credit available.

Yeah. Okay. The remaining $25 million, we have two different tranches that are potentially available to us, and then there's $5 million of additional capital there that is at the lender's option. If you think about the structure of the tranches, the first tranche is potentially available to us later this year. There are some financial metrics that we would need to satisfy to unlock it. We expect to do that by the end of the year and have that be available to us. The next tranche is another $10 million that we could unlock as early as roughly middle of 2027. We are trending toward that as well.

$10 million toward the end of this year, another $10 million middle of next year, potentially available to us, and then $5 million of unallocated that we could work with the lender to unlock as well.

Okay. Thanks.

Thank you. Our next question comes from the line of Dan Arias with Stifel. Your line is now open.

Hi, guys. Thanks for the questions here. Rob, is there something to be said or a conclusion to be drawn from the kind of performance that you saw at consumables this quarter, 30%+ growth? Is that part of an acceleration trend, or do you see that as more episodic to start the year?

It's what we're seeing, Dan, is a few things in the business. You know, the continued growth and the Growth Direct footprint, efficiencies in our ability to validate. It's one of our fulcrum capabilities. The faster we validate and the more efficiently we do it, the faster our customers get into routine use. I would say the most exciting thing is that customers are really using these systems to drive ROIs in their business, which, you know, is extending conversations to more Growth Direct rollouts. It's a really good leading indicator. If you see that in our business, it means customers are happy in using the system and most importantly, getting an ROI, and that activates more and more discussions.

Increasingly, I touched on my trip in Asia, in other conversations. Increasingly, the discussions have become more strategic in nature, you know, at senior levels. It's exciting to see many of our customers thinking about enterprise-wide automation and integration of automation technology. The, you know, the market is definitely trending in the right direction.

Okay. All right. Then, Sean, on the 30 to 38 systems for the year, what portion of that comes from systems that are part of orders that you have in hand, Samsung, et cetera? Basically, I'm trying to understand how much new business you need to win in order to get there. It feels like you're on a pretty decent trajectory here, but curious to have you explain it.

Yeah. Samsung was in Q1. I think you're asking about backlog, which isn't something we've historically talked about. You know, I think it's if we look out over the balance of the year, you know, Rob talked about the funnel. I think we feel good about the funnel. You know, obviously, MilliporeSigma is part of that as well. We have very tight connectivity with them. I'd say, you know, we feel good about where that range is set at this point. That's why we're reiterating it. You know, a good part of that's based on what we see out over the balance of the year. Remember, you know, we tried to clarify a little bit last quarter, you know, there's some variability in that range, right?

Eight systems is a decent-sized range there, and I think, you know, there are opportunities for us to drive, you know, some good movement within that range by getting large multi-system orders that we haven't assumed, and, you know, where we end up with MilliporeSigma this year in terms of what they deliver against their commitment, and the overall environment, which we're obviously watching closely these days.

We're trying to drive to the top end of it, but, we feel good about the range in general.

Okay. No, no additional Samsung placements after 1Q?

Yeah.

Is that right?

Yeah, I don't think we comment on that at this point.

Yeah.

I mean, there's definitely opportunity with Samsung going forward. Whether that happens this year or not, I don't think we comment on at this point, Dan.

Okay. Thank you.

Yep.

Thank you. As reminder to ask question at this time, please press one one on your touch tone. Our next question comes from the line of Brendan Smith with TD Cowen.

Great. Thanks for taking the questions, guys.

Sure

another one on, kind of margin story here. I guess wondering how we should think about any potential inflection and kind of the impact from consumables and services revenue over the coming quarters. I guess, is there, you know, maybe a sweet spot number of total placements that you expect to ultimately kind of hit that tipping point where consumables read-through starts to kind of outweigh new device placements? Really just any kind of color on how to think about the push and pull there on margin.

Brendan, it's Sean. For consumable margins, I think if you go back to what we said back in March, it still holds true. I think we expect to see that moving in a positive direction in the second half, driven in part by volume, but I think also driven very much by the other factors that I think both Rob and I have talked about, which is getting material costs out of the products, including the significant vendor pricing reductions we achieved recently, but also increasing volume and leverage that goes with that from an operating standpoint. Service, I think as we've talked about before, is sensitive to volume.

You know, as we said last quarter, you know, the expectation right now is that we're gonna have a heavier second half than a first half in terms of service revenue with validations. You know, you know, we had the big Q4 last year.

Those systems seem to be teeing up to be more second half than first half in terms of validation, so that revenue's gonna come in the second half, and that will have a positive impact on margins of the second half.

Got it. Great. Thanks. Then maybe just, I know you noted some of the acceleration cell and gene therapy programs. I guess just wanted to maybe get your take on kind of the recent overhaul in leadership at FDA, if you expect any kind of notable changes there, or just anything you're kind of watching over the coming weeks to maybe signal how that momentum shifts, if it does.

Yes, Rob, we watch actively the approvals. As you know, we have very high penetration into the cell therapies, CAR T market, in particular. I think our last reading was 86% of the FDA-approved manufacturers are using our system. As you know, it's a very, very good fit. We watch it actively, and I'm not sure if there's anything we've observed in the past few weeks as far as acceleration or deceleration of approvals. We like generally the pipeline, as I touched on also regionally speaking, to include Asia.

We believe we're well-positioned to win, you know, cell and gene business broadly, whether it's through the principal manufacturers or through the CDMOs. As you know, we've got a good footprint there. We're also very well-positioned, you know, to win that business globally, just sort of region independent. We'll continue to report out on what we see, but, you know, the takeaway for us right now is we are, and our intent is to remain well-positioned to win in the cell and gene market and cell therapy in particular.

Got it. Makes sense. Thanks, Chris.

Thank you.

Thank you. Our next question comes from the line of Thomas Flaten with Lake Street Capital Markets. Your line is now open.

Hey, good afternoon, guys. Thanks for taking the questions. I was wondering if there's any way you could characterize the Millipore sales funnel. Is it, you know, from an industrial vertical perspective, what's their focus? What are they looking at? Any way you could, and I know you don't talk about backlog, but just give us a sense of what kind of number of potential placements you're looking at in the, you know, coming months, year, however you wanna phrase it.

Yeah. Kind of in reverse order. This is Rob, Thomas. I won't speak to the placement numbers. We haven't released that via with regard to Millipore. I can tell you one thing, I'm extremely excited what I'm seeing with regard to the global connectivity and activity and momentum that team is building, the Merck Millipore team. Very happy with how our teams are collaborating. You know, it's a larger company, it's a much larger sales force, so it took a little bit of time to, if you will, get up to flying speed. We're there, and I'm very, very excited about it. MilliporeSigma has hired and focused specialists within their regions, North America, Europe, and Asia.

Their funnels are growing and their relationships are deep and broad, which is activating and building funnel. You know, the next step will be, you know, seeing that funnel convert and close and, you know, potentially the acceleration of sales cycle. That's TBD at this point, to be fair. The, I would say the conditions are present and the predicate steps have been put in place for, you know, for this to be a very successful collaboration. The story's still being written, of course, but I think it's I'm very excited about the leading indicators that I'm seeing, and that's globally. It's not in any one region.

With regard to end markets, there's, there is focus currently, not complete, but I would say, majority of focus within the broader pharmaceutical markets. You know, we're in a lot of places, but we're also not in a lot of customers, and they have reach of far beyond ours and are in many labs. There's a natural match. We've got good brand in pharma, so that's a natural starting area. They also can go deep in other verticals, which are also very large markets, such as personal care, cosmetics, medical device. Those can tend to be, in some cases, more scattered markets. You need a broader and larger team to get after and brand and capability. That was another reason why this partnership made sense for us.

You know, that expands our TAM meaningfully. You know, more to tell there, but, you know, the report card right now with regard to the, I'll call it the leading indicators, the actual activities I'm seeing is, I'm personally very excited about it. Yeah. Okay. If no other questions, we're going to wrap today's call. Thanks to everyone for your time and attention, and we'll look forward to speaking with many of you shortly. Thank you.

This concludes today's conference. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Rapid Micro Biosystems Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please advise that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mike Beaulieu of Investor Relations. Please go ahead.

Good morning, and thank you for joining the Rapid Micro Biosystems Fourth Quarter and Full Year 2025 Earnings Call. Joining me on the call are Rob Spignesi, President and Chief Executive Officer; and Sean Wirtjes, Chief Financial Officer. Earlier today, we issued a press release announcing our fourth quarter and full year 2025 financial results. A copy of the release is available on the company's website at rapidmicrobio.com under Investors in the News & 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, assumptions regarding future financial performance, anticipated future cash usage, statements relating to the company's term loan facility, guidance for 2026, including revenue, expenses, gross margins, system placements and validation activities expectations for and planned activities related to Rapid Micro's business development and growth, including the expected benefits from our distribution and collaboration agreement with MilliporeSigma. Customer interest and adoption of the Growth Direct system and the impact of the Growth Direct system on their businesses and operations and statements regarding the potential impact of general macroeconomic conditions on our business and that of our customers. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors, including our ability to meet publicly announced guidance the impact of our existing and any future indebtedness on our ability to operate our business, our ability to access any future tranches under our debt facility and to comply with all of its obligations thereunder. Our ability to deliver products to customers and recognize revenue and market and macroeconomic conditions. For a more detailed list and description of the risks and uncertainties associated with Rapid Micro's business, please refer to the Risk Factors section of our most recent quarterly report on Form 10-Q 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. Please note that today's remarks include certain non-GAAP financial measures. These non-GAAP measures should not be considered in isolation or as a substitute for or superior to financial information presented in accordance with GAAP. They have provided a supplemental information to enhance investors' understanding of our operating performance and may differ from similarly titled measures used by other companies. Reconciliations between these non-GAAP measures and the most directly comparable GAAP measures are available in our earnings release issued this morning. We encourage you to review these affiliations carefully. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 12, 2026. The 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 turn the call over to Rob.

Thank you, Mike. Good morning, everyone. I will begin with a brief overview of our fourth quarter performance and recent commercial wins as well as an update on our key priorities. I'll then share a few comments on our 2026 outlook before turning the call over to Sean for a detailed review of our Q4 financial results and 2026 expectations. Before reviewing our fourth quarter results, I'd like to highlight the first press release we issued this morning announcing that Samsung Biologics is expanding its deployment of the Growth Direct platform through a new multisystem order received in the first quarter of 2026. This follow-on order builds on our existing strong partnership and we are proud to support Samsung's next-generation manufacturing strategy. This expansion yet again highlights the impact that Growth Direct delivers to the world's leading pharmaceutical manufacturers as they seek to automate and modernize their critical quality and manufacturing workflows. Now turning to our performance. This morning, we reported total fourth quarter revenue of $11.3 million, representing 37% year-over-year growth and a quarterly record. These results exceeded the increased guidance we provided in November and marked our 13th consecutive quarter of meeting or exceeding expectations. We placed 16 growth direct systems in the quarter, and ended the year with 190 systems placed globally, of which 155 are fully validated. A highlight of the quarter was a record multisystem order from Amgen reflecting our continued investment in the growth -- in the global rollout of the Growth Direct platform. Amgen is deploying systems across multiple sites in North America, Europe and Asia and fully leveraging all applications to include environmental monitoring, bioburden and water testing. Additionally, Amgen will sponsor our first-ever North American Growth Direct Day in the second quarter. Product revenue increased 78% in the fourth quarter with outperformance driven by strong system placements. For the full year, consumable revenue increased 17% reflecting continued strong utilization across our installed base. Consumable growth remains one of the clearest indicators that customers are actively using their systems and realizing meaningful ROI. Importantly, consumable strength underpins recurring revenue, which increased 15% for the full year and accounted for 53% of total revenue, highlighting the durability and visibility of our business model. Turning to gross margin. Fourth quarter gross margin was impacted by inventory-related charges that Sean will discuss shortly. This does not diminish the significant progress we made throughout 2025 in reducing product costs improving manufacturing efficiencies and increasing service productivity. As I look back at our performance over the last 3 years, total gross margin has improved by over 50 percentage points trajectory, we are confident we can sustain. Now turning to the MilliporeSigma collaboration. Our partnership is entering its second year, and we are pleased with the progress to date. In support of their commercial growth strategy, we have completed specialist training and MilliporeSigma has established customer demo labs across Europe and Asia. These labs will serve as an important part of the sales process to give customers hands-on experience with the Growth Direct system. As a reminder, Rapid Micro operates demo labs in North America, Europe and Asia as well. We continue to work with the MilliporeSigma team as they expand their funnel and drive sales, which we expect will meaningfully contribute to our 2026 system placements. Turning to our supply chain. We are advancing opportunities to reduce product costs and leverage MilliporeSigma's broader logistics network and other capabilities. Combined with our internal efforts, we have already secured meaningful consumable cost reduction benefits that will positively impact product margins starting in the first half and accelerating in the second half of 2026. Now I'd like to briefly review our priorities and 2026 outlook. We are off to a strong start of the year and our priorities remain consistent: accelerating system placements, expanding gross margins continue to innovate new products and prudently managing our cash, all while maintaining disciplined and consistent execution. On the commercial front, we remain focused on expanding and converting our sales funnel. The multi-system global rollout at Amgen and today's announcement that Samsung Biologics is meaningfully expanding its deployment of the Growth Direct platform underscore the substantial opportunity we see across the global pharmaceutical market. In addition, our partnership with MilliporeSigma continues to complement our direct sales efforts by broadening our global reach in our core pharmaceutical segments and providing access to attractive adjacent customer segments. As we work to expand the sales funnel, our annual Growth Direct Day remains one of the most effective customer-focused forums. This year, we are expanding the impact by adding events in North America and Asia. In addition to our premier recurring event in Europe. As a reminder, these sessions bring current and prospective customers together to showcase our automation and improved data management delivered by the Growth Direct can drive meaningful operational improvements and compliance within manufacturing and quality control. We are especially pleased Amgen will sponsor the North American event in Q2, reflecting their confidence in and commitment to the Growth Direct platform. Looking at the broader market landscape, there are strong tailwinds augmenting our consistent commercial execution. These include increased adoption of full automation, a greater focus on data integrity by industry and regulators, advanced manufacturing modalities driving the need to modernize and growing investment in the onshoring of pharmaceutical manufacturing in the U.S. We believe these tailwinds will remain strong and durable, which will contribute to position us well for sustained long-term growth. In addition to staying highly focused on our priorities of accelerating growth direct placements and expanding gross margins, we continue to innovate to provide new value-add solutions to our customers. To this end, we expect to release our next-generation cloud-native software platform in the second half of 2026, which will redefine the growth direct experience for our customers. Our AI engineers have spent 15 years developing and refining the industry-leading algorithm for microbial growth detection. And this new platform will leverage that experience to deliver significant additional value through AI-driven analytics and insights across our customers' global data. As a Growth Direct installed fleet expands globally and generates increasing volumes of digital data, this new software and data platform will provide meaningful value to our customers by enabling deeper insights and faster decision-making power for global quality and manufacturing operations. Against this backdrop, we are initiating full year 2026 revenue guidance of $37 million to $41 million, including 30 to 38 system placements. We expect meaningful gross margin expansion and expect to achieve approximately 20% gross margin for the full year, with performance accelerating in the second half. We believe this guidance is both prudent and achievable and reflects our track record of consistent execution. Sean will provide some additional details around the assumptions included in our outlook as well as potential upside opportunities and we look forward to updating you as the year progresses. And with that, I'll turn the call over to Sean to discuss our fourth quarter performance and 2026 outlook in more detail. Sean?

Thanks, Rob, and good morning, everyone. I'll begin my comments this morning with a review of our fourth quarter 2025 results and then discuss our first quarter and full year outlook for 2026. We'll then open the call up for questions. Fourth quarter revenue increased 37% to a record $11.3 million compared to $8.2 million in Q4 2024. During the fourth quarter, we placed 16 Growth Direct systems, which was also a record compared to 6 systems in the fourth quarter last year. We also completed 3 validations in the quarter compared to 4 in Q4 last year. Product revenue, which is comprised of systems and consumable revenue, increased 78% to $9.3 million in the fourth quarter compared to $5.2 million in Q4 2024. This was primarily driven by the increase in system placements. Consumable revenue grew 11% in the fourth quarter compared to Q4 last year. Service revenue was $2 million in the fourth quarter, which was in line with the guidance we provided in November, compared to $3 million in Q4 2024. As a reminder, the timing of validations tends to be the largest driver of quarter-to-quarter variability in service revenue and the validation revenue we generated in Q4 2024 and remains a company record. Fourth quarter recurring revenue, which consists of consumables and service contracts increased 10% to $4.6 million compared to $4.2 million in Q4 2024. Nonrecurring revenue, which is comprised mainly of systems and validation revenue increased 65% to $6.7 million. Turning to margin. Product margin was negative 8% in Q4, this includes a $1.1 million or 12 percentage point impact related to the write-off of unusable consumable inventory in the period. Our manufacturing team has addressed the underlying situation, and we do not expect any further charges related to this in 2026. Excluding the impact of this write-off, Q4 product margin was positive 4%, which was consistent with our guidance. Service margins were 22% in the fourth quarter compared to a record 47% in Q4 last year. The lower service margins in Q4 this year were due to the lower service revenue in the period, which more than offset the positive impact of service productivity improvements and cost reductions made during 2025. On a combined basis, fourth quarter gross margin was negative $0.3 million or negative 3% compared to positive $1 million or 12% in Q4 last year. Excluding the impact of the inventory-related charges we recorded in the period, total Q4 gross margin was positive 7%. This was in line with our guidance and slightly lower than the Q4 last year due to the impact of lower service revenue on service margins. Moving down the P&L. Total operating expenses were $11.9 million in the fourth quarter compared to $11.2 million in Q4 2024. Within OpEx, R&D expenses were $3.2 million, sales and marketing expenses were $3.3 million and G&A expenses were $5.3 million. For the full year, total operating expenses decreased by 3%, while revenue increased by 20%. Interest income was $0.5 million and interest expense was $0.8 million in the fourth quarter. Q4 net loss was $12.5 million. This compares to a net loss of $9.7 million in Q4 last year. The larger net loss in Q4 this year was primarily attributable to the inventory charges we recorded as well as the lower service margin and higher interest expense in the period. Net loss per share was $0.28 in Q4 compared to net loss per share of $0.22 in the prior year quarter. With respect to noncash expenses and capital expenditures, depreciation and amortization expenses were $0.8 million, stock compensation expense was $0.6 million and capital expenditures were $0.1 million in the fourth quarter. We ended the year with $39 million in cash and investments, which was in line with our guidance as well as $25 million of unused capacity under our debt facility with Trinity Capital. Our net cash burn was $3 million in Q4. As a reminder, Q4 is typically our lowest burn quarter, while Q1 is typically our highest burn quarter each year. Now I'll turn to our 2026 outlook. For the full year 2026, we expect total revenue to be in a range of $37 million to $41 million, which assumes we place between 30 and 38 systems. This system placement range reflects a few key variables. First, our guidance continues to account for some ongoing uncertainty around the timing and scale of customer purchase decisions, particularly with respect to larger multisystem opportunities which often involve more complex purchasing considerations. Second, the low end of our guidance range assumes we do not place any new large multisystem orders in 2026 other than the Samsung order announced this morning. And third, we continue to expect MilliporeSigma to contribute meaningfully to system placements in 2026. However, the low end of our guidance range does not assume they satisfy their full year 2 system commitment since some of those systems may be placed in Q1 2027. For Q1, we expect revenue of at least $7.5 million, including at least 5 system placements. Consistent with historical trends, we expect at least 30% of our system placements to be made in the first half of the year with the remainder in the second half. We also expect revenue and placements to peak in Q4, in line with typical seasonality. Turning to consumables. We expect revenue in Q1 and Q2 2026 to be slightly higher than Q4 2025 and then increased gradually over the remaining quarters with variability driven by the timing of customer orders and shipments. Looking at service, we expect revenue between $2.3 million and $2.6 million in Q1. We then expect service revenue to step down slightly in Q2, followed by meaningful increases in Q3 and again in Q4 based on our current expectations with respect to the timing of installation and validation activities. We expect to complete at least 25 validations in 2026 and with at least 3 in the first quarter. Turning to margins. We expect our Q1 gross margin as a percentage of revenue to be in the mid-single digits with product margin of negative single digits and service margin above 30%. Thereafter, we expect to reach and maintain positive product gross margin in each of the remaining quarters of 2026, led by improving consumable gross margin, which we expect to turn positive in the second half of the year as we fully realize the benefit of meaningful material cost reductions we recently locked in as well as benefits from other cost reduction and manufacturing and efficiency initiatives. For the full year, we expect total gross margin of approximately 20% with a Q4 exit rate in the mid-20% range or better, product margin in the high single digits to low teens and service margin above 40%. Consistent with prior years, we expect quarter-to-quarter variability in gross margin to be driven by progress on our product cost reduction and service productivity initiatives, overall revenue volumes and the revenue mix between systems, consumables and service in each period. We expect operating expenses to be between $47 million and $51 million for the full year. We expect $10 million in noncash expenses, including depreciation and amortization expense of $3 million and stock compensation expense of $7 million. We also expect CapEx of $2 million, interest income of $1 million and interest expense of $2 million. Looking further ahead, our strategic priorities of accelerating system placements, improving gross margin, innovating new products and prudently managing our cash remain unchanged. We continue to build momentum in our business, including our partnership with MilliporeSigma, which we expect will further accelerate progress on these strategic priorities over the coming years, including the meaningful contribution to system placements we've incorporated into our guidance for this year. That concludes my comments. So at this point, we'll open the call up for questions. Operator?

[Operator Instructions] And our first question comes from the line of Tom Flaten of Lake Street Capital Markets.

I appreciate all the detail on the guide. The gap between placed and validated systems has widened since 2023. What are you guys doing to or are you doing anything to shrink that gap over time? Is that just more engineers to complete the validation? Can you help us think about that a little bit?

Yes, Thomas. I'll take a shot at that. I think part of that -- a lot of that has to do with timing actually in terms of there can be variation between when we deliver a system and when that validation process gets started, depending on the customers' plans and resourcing that goes along with that. So I think we'd expect to see that come down. I think we talked about Amgen this time. I think as we look at that, some of the color we gave in the call -- prepared remarks, it really ties into how we expect that to roll out, which think the majority of that work is right now, our plan working with them would be that a lot of that would happen at the end of this year. So I think if you look at a deal like that, the expectation would be if you'll see that placed in Q4 last year, we'll get most, if not all that work done with them by the end of this year. So that gives you some indication of how these things can typically go. So there is a natural lag in there. I think you'll see that variance come back in a bit as we work through that and a few other customer situations. So I don't -- it's nothing we're concerned about. It is something we keep our eyes on, and it's something that we will continue to work to keep tight as much as we can. So I don't know, Rob, if you have any comment on this.

Yes. It's clearly a robust validation year as well. You can see that backlog being worked and some of this is to Sean's point, driven by order timing, size and timing of orders and just the sequencing of our team and our customers' teams and working through the validations.

That's great. I appreciate that color. And then just with the Samsung announcement this morning, could you just comment on the percentage of your place systems that are within CDMOs and how you see that space evolving over time relative to the manufacturer -- or to the drug originators themselves?

Yes. So it's interesting. I don't know the exact percentage. So I don't want to put that out. But it's sizable. We've previously announced Lonza as a customer. Samsung, obviously, in other CDMOs as well. We have a very strong value proposition for CDMOs as well as probably call principal manufacturers. We're growing clearly, today is a good example of both Amgen and Samsung. So you've got both a principal manufacturer and a CDMO. But CDMos in particular, or benefit from our ability to turn their lines faster or lease product faster. And also, to a certain extent, in some cases, market the use of advanced technologies and their quality control and manufacturing operations. So yes, quite strong in CDMOs and we plan to stay that way and grow with the CDMO space. We also have talk about it significantly on these calls. We also have small mid CDOs globally as well. So generally, it's a very strong segment for us as well as the principal manufacturers. I can't say it's one stronger than the other. They're both strong right now, and we tend to be in both segments, as we've said, generally more in the advanced modalities, primarily biologics and also in the cell and gene categories within CDMOs and also principal manufacturers.

Our next question comes from the line of Dan Arias of Stifel.

Sean, on gross margins, where is the confidence in the 20% number for 2026 kind of felt like a good 4Q number would be the jumping off point for what you're going to do this year. I understand it was due to the inventory charge, but the number is sort of the number. So what are the key moving pieces and risks when it comes to your own process? And then as we think about product gross margins being back to negative in 2Q, how do we get comfortable with the idea that as we start to feel better about placement momentum, which has been good, we can also feel good about gross margins that there doesn't have to be an offset there.

Yes. Yes. I'll take that one, Dan. I thinking about it, there's a couple of key drivers to focus on from my perspective. One is -- we talked -- or I talked to my comments about the fact that we have recently locked in some meaningful product cost reductions with some vendors that will benefit us beginning in Q2 with that accelerate in Q3 and Q4. So that is a substantial reduction from what we're paying for some of the key materials in our product, and that's consumables, specifically. So that's number one. Number two, I'd say is I talked a minute ago about how we expect the year to roll out from a validation and service revenue standpoint, you kind of see in recent quarters, what lower service revenues can do from a leverage standpoint in our service margins. We expect to see that go back the other way as we work our way through this year. So to get to 20%, I think the two of the largest drivers, if not the largest drivers are that those cost reductions kind of kicking in full bore in the second half and us getting our service revenues back up to levels where they can generate meaningful margins beyond where we've been over the past quarter or two. Volume is also a big part of it. So as we progress through the year, we're manufacturing more. We expect to sell more. I talked about peaking and placements in those things also contribute. So I think it's important to note the comment that we expect Q4 exit to be mid-20s or above. So that trend should be growing as we work our way through the year overall for total margins. And those are the key factors that give us confidence in being able to achieve those kinds of numbers for the year and exiting the year.

And Dan, just to put maybe an estimation point on one thing Sean said on the product cost, in particular. With regard to execution risk, we have contractual agreements in place with the supply base, which is meaningful with regard to how we get comfortable and confident in that cost out in addition to the other elements that Sean mentioned.

No. Okay. Okay. That's helpful. All right. And then maybe on the systems to Samsung and Amgen, how do you see utilization ramping there? And then just on overall utilization, can you maybe just talk about consumables pull-through per system consumables growth has been pretty good here. We all presumably have this placement and pull-through driven model. So Sean, we've talked a little bit about this. Can you just maybe set a baseline for where 2025 pull-through came in? And then to what extent that number might be higher in 2026.

Yes. So I guess on the first question, Dan, I think -- in terms of what will happen with Amgen and Samsung in terms of pull-through, I think I talked about Amgen a little bit ago, latter part of the year, likely when we get those fully validated. Samsung, I don't know that we have a fixed timetable for that yet, but I'm sure it kind of follows that similar time line would be my best guess. So in terms of where we get with them, I think validations are definitely in play for 2026, our expectation, frankly, in terms of when they start to contribute to recurring revenue, I'd expect that to be more a 2027 factor. In terms of pull-through, I think we continue recently, I'd say, to be kind of in that single-digit year-over-year improvement range that we've talked about historically. So I'd expect that, that will be similar. I think with big orders that kind of a bolus of validations like we're talking about with these larger orders, I think there is an opportunity for us to see more meaningful step-ups in that as we bring those systems online kind of in short periods of time. So for now, I'd say, think about it as single digits in 2026. I think as we look at '27 that we would potentially have opportunity to see a bigger step-up than that in '27.

Our next question. Our next question comes from the line of Anna Snopkowski of KeyBanc.

Congrats on the quarter and the exciting announcement with Samsung. Maybe to start do you think you could share more insight on the Samsung multisystem order? Maybe would you say it's fair that this is in the double-digit range and should we expect this to roll out over the course of 2026 or just Q1? And then just also on this more on the strategy. Is this one site? Is this part of the global rollout or maybe a therapeutic area? And then I have one follow-up.

Yes. Generally, Samsung. We won't get into the specific quantum of it, but it's the next phase of rollout. I think many of you may remember, we had the initial launch with Samsung a couple of years ago. This is a second way, which is actually a larger order size. And it's focused primarily on their principal area in South Korea, although some of you may know that Samsung is also acquiring around the world. So also in scope. And as I mentioned a couple of years ago, we expect to grow at Samsung in the quarters and years ahead. And I'll say it again, we expect to grow a Samsung in the quarters and years ahead. Interestingly, which we didn't talk about in the prepared remarks, but also discussing other collaboration opportunities with Samsung, which we're quite excited about. So more to follow on that. And part b, Anna?

Okay. Perfect. And then my second question, just more in general on repeat orders versus new customers. Do you expect these customers, repeat customers like Samsung to move through your pipeline quicker? And then just in terms of validation, is that usually a quarter lag? Or what should we expect both from Samsung and just repeat customers in general?

Yes. So a general rule of thumb is repeat customers go faster, generally, both in the sales process and the validation process. It's a general takeaway. Now certain things like some of these large orders Amgen as an example, and other large customers. We haven't specifically mentioned by name across several sites around the world. The sites have projects going on at a given time. So the timing could be throttled by a site-based activity. But generally, it's quite faster, generally, we have what's called a modular validation, which basically leverages the knowledge and work we've done on the initial validation usually at a starter site, and we can roll that out in an expedited fashion to accelerate the process. And as you may imagine, our land-expand strategy is focused on that. But also to your point, we're also -- the team is also out there. acquiring new customers as well, which can be a bit longer, both in the sales process and the initial validation.

And our last question comes from the line of Brendan Smith of TD Cowen.

I wanted to actually first ask about the kind of next-gen cloud-native software platform you referenced in the prepared remarks. Can you maybe just give us a bit more color on how this gets integrated into devices moving forward? Is this something that all new orders will automatically include some of these analytics capabilities? Is that software update push you can monetize into existing installed base? Just kind of wondering how we should think about that contributing to growth.

Yes. So thanks for the question, Brendan. It's a -- think of it as a a bit of a phased approach. So out of the box, first of all, it's a complete rewrite of our application software for the Growth Direct. So it's a completely different architecture. So day 1, the customers benefit from a modern UI, much easier integration into some of their IT infrastructure. And by cloud native, it's been built around a cloud infrastructure. We envision the customers' cloud will run it. But from a future revenue standpoint, we could also provide cloud services. Right now, the system is in a prelaunch phase with a major customer operating in their cloud, running the Growth Direct and the feedback has been exceptional. So we're quite excited about that. So out of the box, a couple of benefits. First, a complete rewrite, so customers benefit from easier navigation, easier integration, a more modern UI, the ability to access data from the cloud, from any device versus through their IT infrastructure attached to their limbs. Over time, we see the ability to provide services against that cloud data. So imagine a fleet of Growth Direct generating. And the idea came from we had these Growth Direct around the world is generating all this data. How can we help customers benefit from that. So the Growth Direct would be effectively an appliance other technologies can also plug into this technology and feeds into a cloud infrastructure. And then against that, we could provide services against that, predictive analytics, other types of insights on seasonality, quality failures, potentially speciation and ID services. And that's really part of the vision. We're not going to get into too much detail on what those are and how we plan to monetize it. But think of this as step one to a couple step multiyear process to really advance from the automation side into the, I'll call it, the AI sort of higher-powered analytics and cloud-enabled side of our business, which will -- the goal is to continue to drive to recurring -- high-margin recurring revenue over time. And -- what we've seen is that customers are -- especially in pharma, which can be a little conservative, are open to discussing how AI and cloud, in particular, can enable their environment. So we're not really pushing against the closed door. It's really -- it feels like we're pushing against an open door. And in some cases, customers are asking us for services in this general category.

Got it. Super helpful. And then maybe just one last one on some of the consumable cost reduction benefits. I think you guys spoke to starting to see now. Can you maybe just expand a bit on what some of the moves you guys have made on your side, even within the Millipore network, I know you referenced maybe what else you're planning there this year to kind of drive that added production in the second half.

Brendan, it's Sean. Yes, so we are still working with MilliporeSigma on several different opportunities. I think some could benefit this year. Some are more longer-term focused in terms of things we could do in very -- as we've talked about in the past, it's quite a broad pallet of things that we're looking at in terms of things that could benefit our margins, not just material cost reduction. I'd say that the locked-in savings that we have at this point that are going to benefit consumables in 2026 are not with Merck Millipore directly, but they are things that are direct inputs with other vendors that we have in place that our procurement team has done a really good job with and leveraging our growth, leveraging other relationships to be able to get us. What I would say is kind of a step change reduction in cost for a couple of different key inputs into the material that will benefit us this year. So we're excited about that. As I said earlier, it's going to be a key driver of our gross consumable margin expansion by association overall gross margin expansion. And we think it's something that we can use as a template to drive future reductions in others in the future and continue to drive those consumable margins up.

Thanks, Brendan. Well, thanks, everyone, for your time and attention. We'll wrap the call up at this point. Thanks again, and look forward to speaking with many of you shortly.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.