Rapid Micro Biosystems, Inc. (NASDAQ:RPID) Q4 2022 Earnings Call Transcript

Rob Spignesi : Yes, sure. Casey. So, we do have some downtime that’s planned. This was not what we encountered in this particular situation. We have looked at the causes of the unplanned downtime. We understand them. We have addressed them. And we feel good that they won’t recur. We will continue to focus on that and make sure that we do what we can to make sure that’s what actually rolls out. So as you think about ’23 guidance, we have not assumed that we see recurrence of that. We believe we have kind of addressed what we ran into in Q4. In terms of the impact, it was meaningful. We are not going to give a quantified number. But I would say, it’s the #1 contributor of our variance from what we expected in the fourth quarter in terms of margin performance, compared to what we thought going into the quarter.

Rachel Vatnsdal: Got it.

Rob Spignesi : And then you asked about cadence — sorry, I didn’t mean to interrupt. You asked about cadence in ’23. You are right. We guided that we think Q1 will look a lot like Q4. I think that’s true for the quarter in general. And then as we work way through the year, given what I said a few minutes ago, we expect to end the year getting pretty close to positive in Q4. So I think if you kind of roll out the revenue guidance we gave and the sequencing there with the volume increases that should come along with that, I’d expect to see the margin followed pretty closely in terms of the step-up, as you work your way through the year.

Rachel Vatnsdal: Got it. That’s helpful. And then just on the pull through per instrument on the consumable side, I think this year was around $80,000 per system. At our conference you talked about pull through increasing high singles to potentially mid-teens in 2023. I guess, can you just walk through what’s embedded in the 2023 guidance from an instrument pull through perspective? And then what needs to happen for you guys to get to the high end of that range? Yes, just like puts and takes into that range.

Rob Spignesi : Yes. So we did finish the year in ’22 around that $80,000 mark, excuse me. The guidance has built into it. I think high single-digits in terms of the full year growth in that metric. And I’d expect us to start the year in the first half below, where that would put us and to finish the year above where that would put us. I think the things moving validations ahead inline with what we expect is critical to make sure that happens. As is some of the things working on around what we refer to as Project Rapid where we are doing things to reduce the amount of time it takes to actually get a validation completed. So I’d say, we haven’t assumed heroics on those things to get to the guidance number, so there is potentially upside there, if we can over execute on that. But those are the main things that would drive our ability to get to that range and that high single-digit type growth number for the year versus the $80,000.

Rachel Vatnsdal: Got it. And then maybe just should we think about instrument ASP in 2023? Just curious if you have a plan on moving price around just given the macro environment one way or the other?

Rob Spignesi : Yes. We have a mix — we generally took prices up this year. I’m not going to get into a lot of specifics. But I think as we look at ASPs on systems, we do expect a modest increase in ASPs, as we compare ’23 to ’22.