SOPHiA GENETICS S.A. Q2 FY2025 earnings call

• Revenue growth reaccelerated in Q2 with total revenue up 16% YOY despite BioPharma headwinds; excluding BioPharma, revenue grew over 20%.
• New customer signings were strong: 35 new core genomic customers in Q2, totaling 63 YTD. Clinical bookings exceeded expectations.
• Announced a major multiyear extension of collaboration with AstraZeneca focusing on AI-powered predictive model for breast cancer and real-world evidence generation.
• Cash burn reduced notably to $8.7 million in Q2, a 35% YOY improvement. Adjusted gross margin was 74.4%, up 120 basis points YOY.
• Innovation days hosted in Geneva and Boston brought together top pathologists, oncologists, etc., to discuss AI and SOPHiA DDM use for patients.
• Pipeline more than doubled since the same time last year, reflecting strong end markets and sales discipline.

Total revenue grew 16% year-over-year in Q2 2025 despite BioPharma headwinds. Excluding BioPharma, revenue grew over 20%. Regionally, North America and Asia Pacific had 24% and 33% year-over-year revenue growth respectively in clinical. EMEA growth was solid with the UK as a driver. Latin America had softness but recent Dasa expansion. In applications, HemOnc analysis grew 19% YOY in Q2. Liquid biopsy application MSK-ACCESS saw 11 new customers in Q2, bringing total global customers to 50. Revenue contribution from different segments: BioPharma had headwinds, while clinical segments excluding BioPharma showed strong growth.

• Reaffirmed full-year revenue guidance for 2025 of $72 million to $76 million, representing 10% to 17% growth on a reported basis. Q4 expected to be the strongest seasonally.
• Adjusted EBITDA loss guidance for 2025 remains $35 million to $39 million.
• Revenue related to AstraZeneca partnership will primarily begin in Q4 2025, with milestones continuing into 2026 and beyond.
• Expect exchange rates to remain volatile, potentially impacting reported results.

• Macro uncertainties leading to volatile exchange rates, which may affect reported results.
• BioPharma headwinds that previously impacted overall revenue growth.
• Clinical implementation timelines that could affect revenue recognition, though efforts are underway to compress these timelines.

Q: Any additional color on what the AstraZeneca partnership milestones look like and what needs to be done to achieve them?

A: The AstraZeneca deal is a multiyear one with a series of deliverables over several quarters and into a multiyear period, with milestones based on delivery of certain items and achievement of outcomes, and the team feels confident in achieving the full value.

Q: Could you provide more on MSK-ACCESS adoption trends in the US from signing to revenue recognition?

A: Liquid biopsy is clinically relevant, MSK-ACCESS has 50 customers globally, 11 new in Q2. First cohort of US customers signed over a year ago are starting to come online, with ramp expected, and 50-plus logos in the pipeline in the US.

Q: Decision to draw the $35 million revolver?

A: To strengthen cash position, with cash balance at over $95 million, providing liquidity for near-term growth as growth accelerates across clinical and pharma.

Q: On AZ contract, is it predominantly milestone payments or has baseline payment?

A: The AZ contract has a mix of base and milestone payments, with milestones being deliverables like building algorithms and deploying them, not at-risk related to AZ's success in developing a product.

Q: On implementation timelines for MSK-ACCESS and other products?

A: MSK-ACCESS implementation timelines can be affected by sample acquisition, but there are examples of faster implementation, with efforts to compress timelines using improved processes and automation to speed revenue pull-through.