Earnings call transcript: Rapid Micro Biosystems Q2 2025 sees revenue miss

In its Q2 2025 earnings call, Rapid Micro Biosystems reported earnings per share (EPS) of -$0.27, slightly below the forecast of -$0.26. The company’s revenue of $7.3 million fell short of the expected $7.75 million, marking a negative revenue surprise of 5.81%. Despite a 10% year-over-year revenue increase, the market reacted negatively, with the stock dropping 4.12% to $3.12 in premarket trading. The company has shown remarkable momentum this year, with a 262% year-to-date return according to InvestingPro data, though maintaining this trajectory may prove challenging given its current cash burn rate.

Key Takeaways

• Revenue increased by 10% year-over-year but missed forecasts.
• Gross margins improved by 7 percentage points from the previous year.
• The company reaffirmed its full-year revenue guidance of at least $32 million.
• Stock price declined by 4.12% in premarket trading following the earnings release.

Company Performance

Rapid Micro Biosystems showed a 10% increase in total revenue year-over-year, driven by a 15% rise in recurring revenue. The company placed four GrowthDirect systems during the quarter, bringing the total to 169 globally. Despite these gains, the revenue shortfall compared to forecasts suggests challenges in meeting market expectations.

Financial Highlights

• Revenue: $7.3 million, up 10% year-over-year
• EPS: -$0.27, slightly below the forecast of -$0.26
• Gross margins: Improved to 4%, a 7-point increase from the prior year
• Net loss: $11.9 million, compared to a $12.6 million loss in Q2 2024

Earnings vs. Forecast

The revenue miss of 5.81% was significant, despite the EPS being only marginally below expectations. This revenue shortfall contrasts with the company’s previous quarters, where it typically met or exceeded forecasts.

Market Reaction

Following the earnings announcement, Rapid Micro Biosystems’ stock fell by 4.12% in premarket trading to $3.12. This decline reflects investor concerns over the revenue miss, despite improvements in gross margins and recurring revenue. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels. The stock remains above its 52-week low of $0.7987 but is significantly below its high of $4.5, with an impressive 293% return over the past year.

Outlook & Guidance

The company reaffirmed its full-year revenue guidance of at least $32 million, with expectations for Q3 revenue between $7.25 million and $8 million. Rapid Micro Biosystems plans to place 21-25 systems in 2025, although it anticipates achieving the lower end of this range.

Executive Commentary

CEO Rob Spignessi expressed optimism, stating, "We remain quite encouraged with what I’m seeing with pharma conversations." CFO Sean Warches highlighted progress in operational efficiency, noting, "We expect to continue to make significant progress."

Risks and Challenges

• Revenue shortfall may impact investor confidence.
• Global trade dynamics could affect customer purchase decisions.
• Onshoring initiatives face timing uncertainties.
• Supply chain efficiency improvements are crucial for margin growth.
• Market saturation in pharmaceutical manufacturing automation could limit growth.

Q&A

Analysts questioned the company’s ability to meet its system placement targets and the impact of global trade dynamics on customer decisions. Executives emphasized their focus on cost reduction and product innovation to drive future growth.

Rapid Micro Biosystems faces a challenging environment but remains committed to its strategic goals, with a focus on innovation and operational efficiency. While the company holds more cash than debt on its balance sheet, InvestingPro analysis indicates rapid cash burn remains a key concern. For comprehensive insights into Rapid Micro Biosystems’ financial health and future prospects, access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Full transcript - Rapid Micro Biosystems Inc (RPID) Q2 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the Rapid Microbiosis Systems Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Bollier with Investor Relations. Please go ahead.

Mike Bollier, Investor Relations, Rapid Microbiosis Systems: Good morning, and thank you for joining the Rapid Micro Biosystems second quarter twenty twenty five earnings call. Joining me on the call are Rob Spignessi, President and Chief Executive Officer and Sean Warches, Chief Financial Officer. Earlier today, we issued two press releases. The first announcing a new $45,000,000 five year term loan facility with Trinity Capital and the second announcing our Q2 twenty twenty five financial results. Copies of both releases are 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 RapidMicro’s financial condition, assumptions regarding future financial performance, anticipated future cash usage, statements relating to the company’s newly announced term loan facility guidance for 2025, including revenue, expenses, gross margin, system placements and validation activities expectations for and planned activities related to RapidMicro’s business development and growth, including the expected benefits from our distribution and collaboration agreement with MilaporeSigma, customer interest and adoption of the GrowthDirect system and the impact of the GrowthDirect 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 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 RapidMicro’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, 08/12/2025. RapidMicro 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.

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: Thank you, Mike. Good morning, and thank you for joining us. I’ll begin my prepared remarks with an overview of the new term loan facility we announced this morning, followed by a review of our second quarter highlights. I will then provide a brief update on the Millipore Sigma partnership and my current perspectives on customer and market conditions before turning the call over to Sean for a more detailed review of our financial results and our 2025 outlook. As Mike mentioned, we issued a press release this morning announcing a new five year $45,000,000 term loan facility with Trinity Capital.

After careful evaluation by management and the board, and with consideration for all stakeholders, we determined that this was a good time to raise additional capital. The facility supports our continued execution against our long term strategy and reinforces our ability to achieve positive cash flow. Importantly, the loan does not include financial or liquidity covenants and is non dilutive to shareholders. We drew down the initial $20,000,000 tranche at closing, which will be reflected in our third quarter financials. Now turning briefly to our second quarter performance, total revenue increased 10% year over year to $7,300,000 slightly above the midpoint of our guidance range.

We were pleased with the strength across the broader business, including mid to high teens growth in both consumables and service. Of note, recurring revenue increased 15%. Turning to systems, we placed four growth direct systems in the second quarter, which was within the guidance range we provided in May. As we noted on our first quarter call, our guidance reflected the potential for customer site readiness delays, including ongoing construction, which ultimately post several system placements into the second half of the year. Gross margins were 4% in the second quarter, reflecting an improvement of seven percentage points from the prior year.

This marks our fourth consecutive quarter of positive gross margins, a trend we expect to continue as we drive further operational improvements. Turning to our partnership with VillaPoreSigma, we remain excited about the relationship and continue to make meaningful progress across key commercial and supply chain work streams. Our teams are engaging on a regular cadence, jointly developing commercial opportunities and supporting the advancement of the global growth direct sales funnel. Over the past few months, we conducted training and educational sessions with their automation specialists in North America, Europe and Asia. We share a collective view that a long term industry shift is well underway to advance automation, robotics and digital tools within the MicroQC lab.

The Growth Rec platform plays an essential role in this transformation, serving as a key solution for modernizing QC workflows and increasing efficiency in microbial QC testing. Beyond our commercial partnership, we have identified and are pursuing several initiatives focused on lowering our product costs, enhancing supply chain efficiency to support gross margin expansion. Additionally, we are discussing a number of areas with exciting potential for joint innovation and product development. As a reminder, this is a five year agreement and we are just five months in. We are confident in the long term potential of this partnership to meaningfully accelerate GoTherX system placements, improve gross margins and drive product innovation.

Before I wrap up my prepared remarks and turn the call over to Sean, I’d like to share a few thoughts on the market. I continue to be encouraged by ongoing industry trends, including increasing investments in global pharmaceutical manufacturing capacity and a growing shift towards new technologies and automation. We’re hearing strong customer support for these developments. Importantly, we are well positioned to benefit from the significant investment in and build out of new pharmaceutical manufacturing capacity that is starting to take place within The US market. These new facilities will typically incorporate advanced technologies automation and the Growth Direct platform is a clear fit to meet the demands of modern pharmaceutical manufacturing and ensure safe and effective patient care.

At the same time, global trade dynamics are adding further uncertainty to the timing and scale of some customer purchase decisions, especially for larger capital investments. That said, I’d like to highlight a few of the key business drivers as we look ahead into 2026 and beyond. These include a robust sales funnel with multiple customers planning global, multi system rollouts and our strong customer engagement efforts to provide solid visibility into future demand. Increasing contributions from Millipore Sigma driven by their meaningful system purchase commitments beginning in 2026. Consistent execution for over 10, which has been supported by our diverse revenue model, which includes systems, software and services, generating durable recurring revenue from consumables and annual service contracts.

Significant and consistent gross margin expansion. Since the positive inflection we reached in Q3 of last year, we’ve been delivering on our cost reduction initiatives and remain on track to deliver significant margin improvement going forward. And our strong financial position reinforced by the new term loan facility we announced today positions us to build on the meaningful progress we have made across our business. Collectively, these elements reinforce our confidence in the strength of our long term strategy and our ability to deliver sustained shareholder value. I’ll close with a quick look ahead at the strong lineup of industry and customer events we had planned for the 2025.

In October, we will be exhibiting at the annual PDA Micro Conference in Washington, DC, followed by the PharmaLab Congress in Germany in November. We will also hold our annual growth direct day in November, which in the past was hosted by customers such as Lonza and Johnson and Johnson. This year, we’re excited to announce that Daiichi Sankyo will host this two day event near their facility outside Munich, Germany. As in prior years, Growth Direct Day is a two day event that will feature existing and prospective customers discussing the benefits of a Growth Direct platform, sharing best practices, success stories, and a positive impact on their workflows. The event will also include a hands on workshop and a customer site tour.

We look forward to providing further updates on our third quarter earnings call. And with that, I will now turn the call over to Sean.

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Thanks, Rob, and good morning, everyone. Total second quarter revenue of $7,300,000 increased 10% compared to the $6,600,000 we reported in Q2 twenty twenty four. We placed four GrowthDirect systems and completed two validations in the second quarter and now stand at 169 cumulative global systems placed, including 148 fully validated systems. Product revenue increased 6% to $4,800,000 Mid teens consumable growth and higher Mold Alarm software sales in the second quarter this year more than offset the impact of one less system placement compared to Q2 twenty twenty four. Service revenue of $2,500,000 increased 18% compared to Q2 twenty twenty four.

The increase was driven by higher field service activity and higher contract revenue due to an increase in the cumulative number of validated systems on a year over year basis. Second quarter recurring revenue, which consists of consumables and service contracts, increased 15% to $4,400,000 Non recurring revenue, which is comprised mainly of systems and validation revenue, increased slightly to 2,800,000.0 Turning to gross margins. Second quarter gross margin was 4%, marking our fourth consecutive quarter of positive gross margins and an improvement of seven percentage points over Q2 last year. Product margins were negative 11% in the quarter, down slightly compared to Q2 twenty twenty four due primarily to the impact of one fewer system placement and revenue mix between systems and consumables, even as we continue to make progress on our internal product cost and manufacturing efficiency initiatives. On a sequential basis, Q2 product margins improved by 12 percentage points compared to Q1.

Service margins were 32% in the second quarter compared to 9% in Q2 twenty twenty four. The improvement was driven by higher revenues and productivity as well as lower headcount and other service related costs. Total operating expenses were $12,400,000 in the second quarter, representing a decrease of 6% from $13,200,000 in Q2 twenty twenty four, due largely to benefits from the operational efficiency program we announced in August 2024 and the timing of spending on new product development activities. Within OpEx, R and D expenses were $3,200,000 sales and marketing expenses were $3,100,000 and G and A expenses were $6,100,000 Net loss was $11,900,000 in Q2 compared to a net loss of $12,600,000 in Q2 last year. Net loss per share was $0.27 in Q2 compared to a net loss per share of $0.29 in the prior year quarter.

With respect to non cash expenses and capital expenditures, depreciation and amortization expenses were $800,000 stock compensation expense was $1,200,000 and capital expenditures were $400,000 in the second quarter. We ended the second quarter with approximately $32,000,000 in cash and investments. Now turning to our outlook, we are reaffirming our full year revenue guidance of at least $32,000,000 Our systems outlook continues to account for ongoing near term uncertainty around the timing and scale of customer purchase decisions, particularly around multisystem opportunities. Global trade dynamics, including tariffs, are adding to this uncertainty. While our teams are working aggressively to close our 2025 funnel, we now believe it’s prudent to assume that we are more likely to finish the year toward the low end of our previous guidance range 21 to 25 system placements.

With that in mind, we expect Q3 revenue to be in a range of $7,250,000 to $8,000,000 which assumes a range of between four and six system placements in the quarter. Turning to consumables. Consistent with my commentary last quarter, we expect revenue to step up on a sequential basis in both Q3 and again in Q4, with variability driven by the timing of customer orders and shipments. With respect to service revenue, we expect Q3 and Q4 to be relatively consistent with Q2, with variability driven by the timing of validation activities. We continue to expect to complete at least 18 validations in the full year 2025, with at least three in the third quarter.

Turning to gross margins, we expect Q3 to be in line with or slightly better than Q2 due to continued progress on product cost reduction and efficiency initiatives. We then expect gross margins to improve meaningfully in the fourth quarter. For the full year 2025, we continue to expect total gross margins as a percentage of revenue to be in the range of high single digits to low teens. We are closely monitoring the evolving tariff landscape from a cost standpoint. While we started to see some limited tariff driven cost increases on certain materials in the second quarter, we continue to expect to limit any margin impact this year through a combination of our ongoing cost reduction and manufacturing efficiency initiatives, current inventory levels and proactive supply chain strategies.

We expect operating expenses to step down from Q2 to Q3 and to now be between 46,000,000 and $48,000,000 for the full year. We expect full year depreciation and amortization expense of $3,000,000 stock compensation expense of $4,000,000 and CapEx of $2,000,000 Other income and expense, which will now include both interest income on our increased cash balance and interest expense on our recently issued debt, is expected to be $1,000,000 of income for the full year, with income and expense largely offsetting each other in the third and fourth quarters. Finally, I’ll wrap up my prepared remarks with some additional commentary on our cash position and path to cash flow breakeven. As Rob outlined, we recently entered into a new $45,000,000 term loan facility and drew down the first tranche of 20,000,000 The facility includes two additional $10,000,000 tranches, which can be drawn subject to the achievement of certain future commercial and operational milestones as well as a further $5,000,000 tranche that is subject to the lender’s discretion. Following this transaction, we believe that the combination of our new term loan facility, our existing cash balance, expected benefits from our ongoing initiatives to increase system sales, expand gross margins, and tightly control expenses and working capital, and expected benefits from our partnership with MilliporeSigma reinforces our ability to achieve positive cash flow.

With respect to the full year 2025, we now expect to end the year with roughly $40,000,000 in cash. That concludes my comments. So at this point, we’ll open the call up for questions. Operator?

Conference Operator: Our first question comes from Paul Knight with KeyBanc Capital Markets. Your line is open.

Paul Knight, Analyst, KeyBanc Capital Markets: Hi, guys. Congratulations on the quarter. Could you talk about pharma is clearly delaying a lot of decisions in the industry. Were you seeing what degree were you seeing that in the quarter? And is it starting to trend better do you think here in Q3?

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: Hey, Paul, it’s Rob. Thanks for the question. Actually, were quite encouraged by we talked about some near term timing uncertainty, but bigger picture work. I’m personally quite encouraged with what I’m seeing with pharma conversations with senior executives about growth direct plans specifically, in some cases, in many cases meaningful, especially with our existing larger customers. And also, the build out in North America, in some cases, seems to be well underway with customers.

So it’s a mixed bag, I think, of where they’re potentially prioritizing their time, but high ROI projects that the growth direct are seemingly making the cut. And then it was interesting to note that this well announced investment in The US market for some of our customers, it’s an active prioritized project as we speak, clearly benefits rapid microbiosystems over time as well. So we remain quite encouraged. That being said, you heard some commentary about some uncertainty in the trade dynamics, that’s there as well. So I would say there’s no one size fits all, but I do see quite a few encouraging signs and trends with regard to farmer decision making and build outs as it could impact our business positively.

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: And I know that there’s a

Paul Knight, Analyst, KeyBanc Capital Markets: lot of capacity build in the industry, CAR Ts. Does this new capacity build that seems to be strong double digits? Are you writing or taking share in that as we would expect?

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: In CAR T specifically, Paul?

Paul Knight, Analyst, KeyBanc Capital Markets: CAR T and new build. And then part of that question would be, are you going in and doing retrofit on systems as well? And what degree is going into new?

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: It’s a great question. Yeah, the majority of our installations are in site placements are existing facilities. That being said, this is why we’re quite excited about any new build out because typically pharma companies will seek to invest with the current edge. And if really clear, especially in high cost regions like The US, I’d expect personally for the preponderance of automation to be even higher just given the cost of doing business in the region. So not only are we doing well with existing customers around the world, but certainly for any new build, we are a very, very clear and strong fit as well.

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Thank you.

Conference Operator: Thank you. Our next question comes from Dan Arias with Stifel. Your line is open.

Dan Arias, Analyst, Stifel: Good morning, guys. Thanks for the questions here. Sean, Rob’s point on Paul’s question about just what’s going on in pharma, it sounds like things are generally encouraging, particularly pharma build out stuff. Can you just touch on why the low end of the range on systems is the way that you’re thinking the year will shape up here?

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Yes. Hey, Dan. Yes, so I think we’re looking at it just we’re focusing on the next what do we got here, four point five months and kind of how fast things are moving. And that’s it’s really that, Dan. I think what’s happening out there in the market with trade dynamics is not helping in the near term.

I think as we look out long term, there’s lots of reasons, as Rob walked through, for us to be positive on where things are headed. But it really is more of a kind of very near term focus on what we’ve got in our funnel. Like I said, we’re our teams are out there pounding the pavement hard to try to get things closed, but just where we sit right now and what’s happening with those specific opportunities in the funnel. It just feels like where we are right now that it’s prudent to be toward that lower end in terms of how we’re thinking about it.

Dan Arias, Analyst, Stifel: Okay. And then maybe on the consumable side, nice growth there. How stable do you think that is from a quarterly standpoint as we think about the second half of the year and into 2026? Obviously, the placement dynamic is up and down, but I’m wondering whether you think there’s some consistency that comes to a nice level of growth that you’re seeing on the recurring revenue side. Thanks.

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Yes. So I think that’s a good story for us right now. We the guide is that we’re going to step up from Q2 to Q3 and step up again in Q4. In the background there, it’s kind of the things we’re looking for as we go forward. We’ve got a couple new multisystem high volume sites that are coming online in the second half that are helping to drive that.

So that’s what we want to see in the business and we are expecting to see that in the second half and I think that’s a that will help us. It’s one of things that helps us maintain the guide for revenue, even if we point toward the bottom end of the range or the lower end of the range for placements. I think that’s our service business, our consumables business are performing pretty well. So we feel good about them in the second half.

Dan Arias, Analyst, Stifel: Okay. Thank you.

Conference Operator: Thank you. Our next question comes from Brendan Smith with TD Cowen. Your line is open.

Brendan Smith, Analyst, TD Cowen: Great. Thanks for taking the questions guys. Congrats on the quarter. Maybe just a quick one from us. I guess first, you referenced a few different options to kind of continue driving gross margins.

I guess, just wondering if you can expound a bit on some of maybe the more near term levers you see there and when you think some of those might come into play?

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Yes. I’ll take that question. It’s Sean here. Yes. So I think pretty consistent with what we’ve been talking about for a while now in terms of where we’re focused.

I think product cost is a very big area of focus for us. We are making good progress. We expect to continue to make significant progress as you look out over the balance of the year and over the next several years. So product cost, there’s different ways to go after that. There’s a procurement angle there where we’re driving conversations with vendors.

As we grow in volume, there’s more opportunity to leverage that volume into better pricing with vendors as well. We’re getting more efficient in how we manufacture. We’re reducing things like waste. We’re moving more manufacturing in consumables on to our automated line. So those are all areas we’re focusing on in terms of driving margin improvement, with a lot of it focused on consumables, but not all.

We’re looking at different things around product cost as well on systems, and there’s opportunity there for sure. So I think those are critical areas that we’re focused on. I think we have talked a little bit about it’s one of the key pillars of the Merck agreement is that we’re working with them actively right now, as Rob mentioned, on some different opportunities. I think there are some near term things that are right in the crosshairs right now, likely not to help 2025, but we do think that there is some real opportunity to start to create additional tailwinds to margin improvement in 2026. And that’s really just the first phase.

There are other opportunities there that probably take a bit longer to get at, but we’re also working with them kind of early stages to dive deeper into those and assess what the opportunity might look like there. So, very big focus in the business on that broader area and those are a few of the areas that we’re focused on specifically.

Brendan Smith, Analyst, TD Cowen: Got you. Okay. Makes good sense. And then maybe just one more on some of those, call them, potential medium term tailwinds for the onshoring initiatives. It’s a question we get a lot from investors.

So I guess just trying to understand a little bit the potential expected timing for all that to start. I totally understand that a lot of this is a little bit nebulous. But is fair to assume that maybe a lot of those on shoring related tailwinds would potentially be like a mid to second half next year push or do you think there’s like an opportunity to see some of that manifest even sooner? I guess we’re just trying to see how you all view that timeline if there’s any considerations we all should be aware of in that calculus.

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: Yeah, it’s Rob. That’s probably it’s really, I think broadly, I think that’s right. With a lot of I think a dynamic to watch is a lot of pharma companies coming into The US market with a limited supply of engineering and design build firms. So I’d watch the supply and demand dynamic there, specifically with regard to construction timing. Then as that starts the knock on effects of actual lab equipment ordering, if you want to kind of bring it down to our business.

But as I touched on personally, I had conversations with customers who have active projects underway. It’s really hard. I won’t put a pin on when we think we’ll benefit from it. But broadly, we are quite excited about it. Like I mentioned, it’s real from what we can tell.

And then the reality of it is when you do a new build, it’s typically outfitted with the next generation technology. Moreover, when you do a new build in a high cost labor environment, which The US generally is compared to other environments, you also see an increased preponderance, as I mentioned, of automation. So thematically, we like the picture quite a bit. The specific timing, sure, I think you’re going to start to see some of it relatively soon, how it actually gets pushed through the system, sites built, equipment ordered in place, and all that might be a little less clear right now. But the trend is a real there’s a relatively clear signal from the overall trend from our perspective.

Brendan Smith, Analyst, TD Cowen: Gotcha. Yep, makes a lot of sense. Great. Thanks, guys.

Conference Operator: Thank you. Our next question comes from Thomas Flaten with Lake Street Capital Markets. Your line is open.

Sean Warches, Chief Financial Officer, Rapid Microbiosis Systems: Hey, good morning. I appreciate

Thomas Flaten, Analyst, Lake Street Capital Markets: you guys taking the questions. Just a quick one. I don’t want to belabor the macro environment more than necessary, but I was curious if there’s a difference in kind of the attitude among customers who’ve already adopted GrowthDirect versus those that are kind of in the funnel if they have a different outlook towards bringing systems on board, if there’s anything to read into that?

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: It’s a good question, Thomas. It’s Rob. There is. So I think the ones that have adopted the GrowthDirect typically have, in many cases, our larger customers in particular, have ongoing projects or initiatives and some of them meaningful and quite significant. And you can tend to see those better weather uncertainty.

And then the customers and their sites importantly, know and understand the growth of rack they’ve already achieved in many cases an ROI. So certainly, they can tend to be more resilient in these sorts of situations. As you know, we’ve got a fairly decent penetration into the top 20. And our funnel does have a meaningful proportion of existing customers, which helps us, I would say, weather some of the uncertainties out there. And there are some exciting, which we haven’t fully accounted for, larger opportunities in our funnel that could potentially land this year that kind of fall into this category.

But generally, the answer is yes. An existing customer, I would say, if you will, is lower risk ish with regard to the current environment than a new customer to our business.

Mike Bollier, Investor Relations, Rapid Microbiosis Systems: Excellent. Thank you.

Rob Spignessi, President and Chief Executive Officer, Rapid Microbiosis Systems: Sure. Thank you. Think that’s the last question. So thanks for that, Thomas. We’re going to wrap the call this morning.

So thank you all for joining. And we look forward to speaking with many of you soon. Thanks all.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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