SOPH — SOPHiA GENETICS S.A.

SOPHiA GENETICS Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: Q3 revenue reached $19.5 million, a 23% increase year-over-year from $15.9 million.
• Year-to-Date Growth: Revenue growth accelerated from 13% in Q1 and 16% in Q2.
• Gross Margin: Adjusted gross margin held steady at 73.1%.
• Operating Loss: Operating loss was $17.9 million, up from $15.4 million in the prior year.
• Adjusted EBITDA Loss: Adjusted EBITDA loss was $10.2 million, an 8% increase from the previous year.
• Cash Position: Cash and cash equivalents totaled $81.6 million at the end of Q3, with a cash burn of $13.1 million.

2. Strategic Updates and Business Highlights

• Customer Growth: SOPHiA signed 31 new customers in Q3, bringing the total for 2025 to 94, surpassing last year's total of 92.
• U.S. Market Expansion: Revenue in the U.S. grew 30% year-over-year, with significant new customer signings including Geisinger Health System and Baylor Scott & White Health.
• Liquid Biopsy Application: The MSK-ACCESS application has gained traction, with over 60 customers signed and more than 2,000 analyses conducted in Q3.
• Partnerships: Collaborations with AstraZeneca for global deployment of MSK-ACCESS and partnerships with Myriad Genetics and A.D.A.M. Innovations for developing regulated companion diagnostics.
• New Technology: Introduction of SOPHiA DDM Digital Twins, an AI-powered tool for oncologists to simulate treatment outcomes.

3. Forward Guidance and Outlook

• Revenue Guidance: The 2025 revenue guidance was raised to $75 million to $77 million, reflecting a growth rate of 15% to 18%.
• Adjusted EBITDA Loss Guidance: Expected adjusted EBITDA loss revised to $39 million to $41 million for the year.
• Long-Term Outlook: Management remains optimistic about reaching adjusted EBITDA breakeven by the end of 2026 and positive adjusted EBITDA in the second half of 2027.

4. Bad News, Challenges, or Points of Concern

• Operating Expenses: Total operating expenses increased to $30.8 million, influenced by elevated Swiss social charges due to share price depreciation and adverse foreign exchange movements.
• Legal Challenges: A lawsuit from Guardant Health alleging patent infringement could lead to increased legal expenses.
• Customer Churn: While new customer acquisition is strong, there was a churn of smaller accounts, indicating a strategic shift towards larger clients.
• Implementation Delays: A backlog of customers waiting for implementation remains high, which could impact revenue recognition in the near term.

5. Notable Q&A Insights

• Growth Deceleration Concerns: Management acknowledged that the midpoint of the Q4 revenue guidance implies a deceleration in growth, attributing it to a conservative approach rather than a change in business momentum.
• Liquid Biopsy Adoption: Approximately 20% of the 60 liquid biopsy customers have started routine analyses, with expectations for significant ramp-up in the coming quarters.
• Biopharma Spending Outlook: Positive sentiment regarding biopharma R&D spending for 2026, with a strong pipeline and increased engagement with top pharmaceutical companies.
• Implementation Trends: The implementation process remains robust, with no significant macroeconomic impacts noted, including from potential U.S. government shutdowns.

Overall, SOPHiA GENETICS demonstrated strong growth in Q3 2025, with significant customer acquisition and strategic partnerships, despite facing challenges related to operating expenses and legal issues. The company remains optimistic about its future trajectory and market positioning.