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01/10 16:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Revenue Revenue grew 23% year-over-year in Q3 2025, reaching $19.5 million compared to $15.9 million in Q3 2024. This growth was driven by strong business momentum, new customer signings, and expansion in the U.S. market.
U.S. Revenue U.S. revenue grew 30% year-over-year in Q3 2025, driven by new customer signings and increased adoption of SOPHiA DDM applications.
Gross Margin Gross margin was 73.1% on an adjusted basis in Q3 2025, remaining flat year-over-year despite a 40% increase in data processed by the platform. This was achieved through targeted platform improvements that reduced cloud compute and storage costs.
Adjusted EBITDA Adjusted EBITDA improved 13% year-over-year in Q3 2025, excluding the impact of elevated Swiss social charges on stock-based compensation. This improvement reflects strong expense control and natural operating leverage.
Platform Analysis Volume Platform analysis volume was approximately 99,000 in Q3 2025, up 9% from 91,000 in Q3 2024. This growth was supported by new customer implementations and expanded usage of SOPHiA DDM applications.
Core Genomic Customers Core genomic customers totaled 488 as of September 30, 2025, up from 462 in the prior year period. This increase reflects the company's focus on winning larger accounts.
Net Dollar Retention Net dollar retention for Q3 2025 was 108%, with strong performance in Europe, Asia Pacific, and North America, partially offset by a decline in Latin America.
Annualized Revenue Churn Annualized revenue churn remained at approximately 4% in Q3 2025, indicating stable customer retention.
Operating Expenses Operating expenses grew 1% year-over-year in Q3 2025 after adjusting for temporary charges such as Swiss social taxes, foreign exchange impacts, and legal expenses. This reflects strong expense control and targeted investments in sales and marketing.
Cash Burn Total cash burn in Q3 2025 was $13.1 million, up 36.5% year-over-year due to investments in Japan, vendor payments, and increased interest expenses.
MSK-ACCESS: Continued success with the liquid biopsy application, now available globally. Signed over 60 liquid biopsy customers worldwide. Partnered with AstraZeneca for global deployment and announced partnerships with Myriad Genetics and A.D.A.M. Innovations for regulated companion diagnostics in the U.S. and Japan.
SOPHiA DDM Digital Twins: Announced a breakthrough AI-powered research tool that creates virtual representations of patients to simulate outcomes and assist oncologists in treatment decisions. Currently focused on non-cancer applications.
U.S. Market Growth: Revenue grew 30% year-over-year in Q3. Signed major new customers including Geisinger Health System, Baylor Scott & White Health, and Thermo Fisher Lights Labs.
EMEA Growth: Revenue grew 24% year-over-year, with significant contributions from the U.K. (120% growth) and Belgium (70% growth).
Asia Pacific Expansion: Analysis volume grew 35%, with first revenue from Japan coming online through partnership with A.D.A.M. Innovations.
Revenue Growth: Achieved 23% year-over-year revenue growth in Q3, raising 2025 revenue guidance to $75-$77 million.
Operational Efficiency: Maintained gross margin at 73.1% despite a 40% increase in data processed. Improved adjusted EBITDA by 13% year-over-year, excluding Swiss social charges.
Biopharma Partnerships: Signed largest contract in company history with AstraZeneca for breast cancer outcomes. Additional partnership with AstraZeneca for prostate and breast cancer detection using AI algorithms.
Decentralized Testing: Increased demand for in-house testing by hospitals and health systems, driven by operational efficiencies and better patient data utilization.
Regulatory and Legal Risks: Guardant Health filed a lawsuit against SOPHiA GENETICS in Europe and the United Kingdom, alleging patent infringement in the MSK-ACCESS application. This has led to increased legal expenses and potential reputational risks.
Currency Exchange Risks: The strengthening of the Swiss franc by 14% since the start of the year has increased payroll and rent expenses in Switzerland when translated into U.S. dollars, negatively impacting operating expenses.
Market and Regional Risks: Latin America continues to experience softness in revenue growth, which could delay the region's contribution to overall company performance.
Operational and Implementation Risks: The complexity of decentralizing liquid biopsy testing, including workflow heterogeneity and the small amount of circulating tumor DNA in blood samples, poses challenges to reliable implementation and scaling.
Financial Risks: Total cash burn increased by 36.5% year-over-year, driven by higher vendor payments, investments, and interest expenses, which could strain financial resources if not managed effectively.
Competitive Pressures: The company faces increasing competition from other players like Illumina, Ultima, MGI, Element, and Roche, which are deploying advanced products that could challenge SOPHiA's market position.
Revenue Guidance: SOPHiA GENETICS has raised its 2025 revenue guidance to $75 million to $77 million, representing growth of 15% to 18%, up from the previous range of $72 million to $76 million.
Adjusted EBITDA Loss Guidance: The company revised its adjusted EBITDA loss guidance to a range of $39 million to $41 million, compared to $40.2 million in fiscal year 2024. This revision accounts for Swiss social taxes on stock-based compensation and currency impacts.
Future Revenue Growth: The company expects to approach adjusted EBITDA breakeven by the end of 2026 and achieve positive adjusted EBITDA in the second half of 2027.
Market Expansion and Product Growth: SOPHiA GENETICS plans to continue expanding its liquid biopsy application, MSK-ACCESS, and expects it to drive meaningful growth in Q4 2025 and into 2026 as customers complete implementations and ramp up usage.
Operational Investments: The company will make targeted investments in marketing, commercial teams, and implementation teams to support medium-term growth objectives, with a focus on high ROI activities.
Cost Optimization: SOPHiA GENETICS will continue to optimize cloud compute and storage costs, aiming for modest gross margin expansion beyond current levels.
Pipeline and Customer Growth: The company reported a substantial increase in its pipeline, with bookings in the first three quarters of 2025 more than double those of 2024. Average contract value of new customers in Q3 2025 increased by over 180% year-on-year.
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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