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01/10 16:56
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong U.S. market growth, improved gross margins, and significant partnership expansion with AstraZeneca, which is the largest in the company's history. Despite an increase in operating loss, the company's strategic focus on new applications, customer growth, and cost management reflect a positive outlook. The Q&A section reinforces this sentiment with optimistic guidance on product adoption and contract value increases. Although management was conservative about disclosing specific contract sizes, the overall narrative suggests positive momentum, warranting a 'Positive' sentiment rating.
Total Revenue $18.3 million for Q2 2025 compared to $15.8 million for Q2 2024, representing year-over-year growth of 16%. The growth was driven by strong new business bookings and the reacceleration of revenue growth.
Revenue Excluding BioPharma Grew 20% year-over-year in Q2 2025. This growth was attributed to strong performance in the clinical market and new customer signings.
U.S. Revenue Excluding BioPharma Grew more than 19% year-over-year in Q2 2025. This was driven by new business momentum and major new U.S. customer signings.
Adjusted Gross Margin 74.4% for Q2 2025, up 120 basis points from 73.2% in Q2 2024. Improvements were driven by targeted platform enhancements that reduced cloud compute and storage costs.
Cash Burn $8.7 million in Q2 2025, a 35% year-over-year improvement from $13.3 million in Q2 2024. This improvement was partially driven by innovations in data compute and processing power optimization.
Platform Analysis Volume Approximately 95,000 for Q2 2025 compared to approximately 87,000 for Q2 2024, representing year-over-year growth of 9%. This growth reflects increased usage of the platform.
Core Genomic Customers 490 as of June 30, 2025, up from 457 in the prior year period, representing an increase of 33 customers. This growth was driven by a focus on winning larger accounts.
Net Dollar Retention 107% for Q2 2025, with strong performance in Europe and North America, partially offset by a decline in Latin America.
Adjusted Operating Loss $12.6 million for Q2 2025 compared to $9.9 million in Q2 2024, representing an increase of 27% year-over-year. The increase was driven by higher sales commission expenses and foreign exchange impacts.
Adjusted EBITDA Loss $11.7 million for Q2 2025 compared to $8.8 million in Q2 2024. The increase was attributed to foreign exchange headwinds and higher commissions due to improved sales performance.
New applications: MSK-ACCESS liquid biopsy application expanded globally, with 11 new customers signed in Q2, bringing the total to 50 customers worldwide.
Customer growth: Signed 35 new customers to SOPHiA DDM in Q2, totaling 63 new customers in 2025.
AI-powered predictive model: Collaboration with AstraZeneca to develop AI models for breast cancer treatment optimization.
U.S. market expansion: U.S. revenue grew over 19% year-over-year, with major new customers like UC Irvine and University of Alabama adopting SOPHiA DDM.
Global reach: Expanded customer base in Canada, Colombia, Brazil, Australia, India, Malaysia, Turkey, France, Spain, Italy, and Saudi Arabia.
Cash burn reduction: Reduced cash burn to $8.7 million in Q2, a 35% year-over-year improvement.
Gross margin improvement: Achieved a 74.4% adjusted gross margin, up 120 basis points year-over-year.
Strategic partnership: Signed the largest contract in company history with AstraZeneca for AI and real-world evidence in breast cancer treatment.
Pipeline growth: Pipeline has more than doubled year-over-year, reflecting strong sales team performance and market demand.
BioPharma Weakness: BioPharma segment continues to present headwinds, negatively impacting overall revenue growth. Despite new partnerships, stabilization in this segment is still in progress.
Foreign Exchange Volatility: Significant foreign exchange headwinds due to the appreciation of the Swiss franc and euro against the U.S. dollar have increased reported expenses and impacted financial results.
Regional Softness in Latin America: Latin America experienced revenue softness, with growth challenges persisting in the region despite some recent bookings.
Operating Loss and Cash Burn: Operating loss increased to $18.5 million, and adjusted EBITDA loss rose to $11.7 million year-over-year. Although cash burn improved, it remains a concern for long-term financial sustainability.
Complexity of Data and Analysis: The increasing complexity of data, larger gene panels, and additional modalities require significant computational resources, which could strain operational efficiency and cost management.
Dependence on New Customer Implementations: The company’s growth heavily relies on the rapid implementation and ramp-up of new customers, which poses risks if delays occur.
Macroeconomic Uncertainties: Volatility in exchange rates and broader macroeconomic uncertainties could continue to impact financial performance and operational planning.
Revenue Guidance for 2025: SOPHiA GENETICS reaffirmed its full-year revenue guidance for 2025 of $72 million to $76 million, representing 10% to 17% growth on a reported basis. Q4 is expected to be the strongest quarter seasonally.
Adjusted EBITDA Loss Guidance for 2025: The company reaffirmed its full-year adjusted EBITDA loss guidance of $35 million to $39 million. Targeted investments in platform optimization and commercial team expansion are expected to support medium-term growth objectives.
AstraZeneca Partnership Revenue Recognition: Revenue recognition related to the newly announced partnership with AstraZeneca will primarily begin in Q4 2025, with milestones continuing into 2026 and beyond. Expenses related to the partnership may be incurred prior to revenue recognition.
Growth in Clinical and Biopharma Segments: The company expects continued strong growth in clinical segments and stabilization in the Biopharma segment. New Biopharma wins, such as the AstraZeneca partnership, are expected to contribute positively to future growth.
Regional Growth Expectations: North America and Asia Pacific are expected to continue outperforming, with strong growth in the U.S., Australia, and India. EMEA growth remains solid, driven by the United Kingdom and Middle East partnerships. Latin America is expected to recover in the medium term.
Liquid Biopsy Application Growth: The MSK-ACCESS liquid biopsy application is expected to meaningfully drive growth in the second half of 2025 as customers complete implementations and ramp up usage.
Pipeline and New Business Momentum: The company reported a doubling of its pipeline since the prior year and expects continued strong new business momentum, with average contract values increasing significantly year-over-year.
Path to Profitability: SOPHiA GENETICS remains committed to approaching adjusted EBITDA breakeven by the end of 2026 and achieving positive adjusted EBITDA in the second half of 2027.
The selected topic was not discussed during the call.
The earnings call presents a positive outlook with strong financial metrics, including a 13% YoY improvement in adjusted EBITDA and stable customer retention. The AstraZeneca partnership and growth in clinical and biopharma segments are promising, despite conservative guidance. The Q&A reveals strong momentum and optimism for 2026, with significant potential from MSK-ACCESS and biopharma segments. While some details remain confidential, overall sentiment is positive, suggesting a potential stock price increase of 2% to 8% over the next two weeks.
The earnings call highlights strong U.S. market growth, improved gross margins, and significant partnership expansion with AstraZeneca, which is the largest in the company's history. Despite an increase in operating loss, the company's strategic focus on new applications, customer growth, and cost management reflect a positive outlook. The Q&A section reinforces this sentiment with optimistic guidance on product adoption and contract value increases. Although management was conservative about disclosing specific contract sizes, the overall narrative suggests positive momentum, warranting a 'Positive' sentiment rating.
The earnings call presents mixed signals: positive revenue growth, improved EBITDA loss, and strong gross margins, but concerns over churn and competitive pressures. The Q&A highlights effective implementation and partnerships, yet lacks clarity on sustainable margins. No share buyback program and a cautious revenue guidance contribute to a neutral outlook.
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