[Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section encompasses the company's interim financial performance, position, cash flows, equity changes, and detailed notes for the period ended March 31, 2025 [Interim Condensed Consolidated Statements of Loss](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Loss) For the three months ended March 31, 2025, SOPHiA GENETICS reported revenue of $17.8 million, a 12.7% increase year-over-year, with net loss widening to $17.4 million despite improved operating loss Consolidated Statement of Loss (Q1 2025 vs Q1 2024) | Financial Metric | Three months ended March 31, 2025 (USD thousands) | Three months ended March 31, 2024 (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | **$17,779** | **$15,779** | **+12.7%** | | Gross Profit | $12,208 | $10,405 | +17.3% | | Operating Loss | ($16,036) | ($18,756) | -14.5% | | Foreign exchange (losses) gains, net | ($599) | $4,610 | N/A | | **Loss for the period** | **($17,385)** | **($13,704)** | **+26.9%** | | Basic and diluted loss per share | ($0.26) | ($0.21) | +23.8% | [Interim Condensed Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The total comprehensive loss for Q1 2025 was $14.8 million, a significant improvement compared to a total comprehensive loss of $23.1 million in Q1 2024, primarily due to a positive currency translation adjustment Consolidated Statement of Comprehensive Loss (Q1 2025 vs Q1 2024) | Metric | Three months ended March 31, 2025 (USD thousands) | Three months ended March 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Loss for the period | ($17,385) | ($13,704) | | Currency translation adjustments | $2,586 | ($9,393) | | **Total comprehensive loss for the period** | **($14,752)** | **($23,112)** | [Interim Condensed Consolidated Balance Sheets](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $146.7 million from $155.3 million at year-end 2024, mainly due to lower cash, resulting in a decrease in total equity to $85.6 million Balance Sheet Summary | Account | March 31, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | **Total Assets** | **$146,719** | **$155,309** | | Cash and cash equivalents | $68,528 | $80,226 | | Total current assets | $90,051 | $99,405 | | **Total Liabilities** | **$61,106** | **$58,819** | | Total current liabilities | $28,944 | $26,803 | | **Total Equity** | **$85,613** | **$96,490** | [Interim Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased by $10.9 million during Q1 2025, primarily due to a net loss of $17.4 million, partially offset by other comprehensive income and share-based compensation - The company's total equity fell from **$96.5 million** on January 1, 2025, to **$85.6 million** on March 31, 2025[11](index=11&type=chunk) - The main drivers of the equity change were the net loss for the period (-**$17.4 million**), other comprehensive income (+**$2.6 million**), and share-based compensation (+**$3.8 million**)[11](index=11&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash used in operating activities improved to $10.8 million from $14.6 million in Q1 2024, with cash and cash equivalents decreasing by $12.8 million to $68.5 million, following a retrospective reclassification of interest payments and receipts Cash Flow Summary (Q1 2025 vs Q1 2024) | Cash Flow Activity | Three months ended March 31, 2025 (USD thousands) | Three months ended March 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Net cash flows used in operating activities | ($10,750) | ($14,645) | | Net cash flow used in investing activities | ($1,039) | ($1,005) | | Net cash flow used in financing activities | ($990) | ($743) | | **Decrease in cash and cash equivalents** | **($12,779)** | **($16,393)** | | **Cash and cash equivalents at end of the period** | **$68,528** | **$103,735** | - Effective January 1, 2025, the company changed its accounting policy to reclassify interest paid from operating to financing activities and interest received from operating to investing activities, with prior periods recast for comparability[13](index=13&type=chunk)[23](index=23&type=chunk)[27](index=27&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's operations, accounting policies, financial instruments, and other key items, including revenue disaggregation, a new credit agreement, and key management compensation [Company Information and Accounting Policies](index=8&type=section&id=1.%20Company%20information) SOPHiA GENETICS is a Swiss-based, cloud-native software company focused on data-driven medicine, with financial statements prepared under IAS 34, including a significant accounting policy change for interest classification and the elimination of a designated cash requirement - The company is a cloud-native software company dedicated to data-driven medicine, commercializing its SOPHiA DDM™ Platform[15](index=15&type=chunk) - Effective January 1, 2025, interest paid was reclassified from operating to financing cash flows, and interest received was reclassified from operating to investing cash flows[23](index=23&type=chunk)[24](index=24&type=chunk) - In July 2024, the company eliminated the requirement to maintain a **$15 million** designated cash account for its D&O insurance policy[22](index=22&type=chunk) [Fair Value](index=11&type=section&id=2.%20Fair%20Value) The company's financial instruments measured at fair value include Level 1 money market funds valued at $27.5 million and a Level 2 warrant obligation valued at $0.5 million as of March 31, 2025 Fair Value Hierarchy (March 31, 2025) | Financial Instrument | Level 1 (USD thousands) | Level 2 (USD thousands) | Level 3 (USD thousands) | | :--- | :--- | :--- | :--- | | Money market funds | $27,477 | $— | $— | | Warrant obligation | $— | $482 | $— | [Financial Risk Management](index=12&type=section&id=3.%20Financial%20Risk%20Management) The company is exposed to various financial risks, including credit, liquidity, and market risks, with no significant changes in its risk management approach since the end of 2024 - The company's exposure to financial risks and its risk management policies have not changed significantly since December 31, 2024[39](index=39&type=chunk) [Segment Reporting](index=12&type=section&id=4.%20Segment%20Reporting) SOPHiA GENETICS operates as a single operating segment, with the Chief Executive Officer assessing performance on a consolidated basis - The company operates in a single operating segment, with performance assessed as a whole by the CEO[40](index=40&type=chunk) [Revenue](index=13&type=section&id=5.%20Revenue) For Q1 2025, total revenue was $17.8 million, primarily from the SOPHiA DDM Platform, with EMEA contributing 70% and NORAM 17% of total revenue Revenue by Geographic Market (Q1 2025 vs Q1 2024) | Region | Q1 2025 Revenue (USD thousands) | Q1 2024 Revenue (USD thousands) | | :--- | :--- | :--- | | EMEA | $12,467 | $11,003 | | NORAM | $3,055 | $2,980 | | LATAM | $966 | $782 | | APAC | $1,291 | $1,014 | | **Total** | **$17,779** | **$15,779** | Revenue by Stream (Q1 2025 vs Q1 2024) | Revenue Stream | Q1 2025 Revenue (USD thousands) | Q1 2024 Revenue (USD thousands) | | :--- | :--- | :--- | | SOPHiA DDM Platform | $17,345 | $15,418 | | Workflow equipment and services | $434 | $361 | | **Total** | **$17,779** | **$15,779** | [Accounts Receivable](index=14&type=section&id=6.%20Accounts%20receivable) Net accounts receivable increased to $10.7 million as of March 31, 2025, from $7.4 million at year-end 2024, with the largest customer representing 16% of the total balance - Net accounts receivable stood at **$10.7 million** as of March 31, 2025, compared to **$7.4 million** as of December 31, 2024[44](index=44&type=chunk) - The company's largest customer accounted for **16%** of the accounts receivable balance as of March 31, 2025[44](index=44&type=chunk) [Loss Per Share](index=14&type=section&id=7.%20Loss%20per%20share) The basic and diluted loss per share for Q1 2025 was $(0.26), calculated from a net loss of $17.4 million and 66.8 million weighted average shares outstanding, an increase from $(0.21) in Q1 2024 Loss Per Share Calculation | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net loss attributed to shareholders (USD thousands) | $(17,385) | $(13,704) | | Weighted average number of shares in issue | 66,844,516 | 65,308,830 | | **Basic and diluted loss per share** | **$(0.26)** | **$(0.21)** | [Leases](index=15&type=section&id=8.%20Leases) In June 2024, the company entered into a 73-month office lease in Boston, recognizing a $2.0 million right-of-use asset and a $1.9 million lease liability in September 2024 - The company signed a 73-month lease for office space in Boston in June 2024, recording a right-of-use asset of **$2.0 million** and a lease liability of **$1.9 million**[46](index=46&type=chunk) [Borrowings](index=15&type=section&id=9.%20Borrowings) In May 2024, the company secured a $50.0 million credit agreement with Perceptive Credit Holdings, drawing $15.0 million and issuing warrants, while terminating an existing CHF 5.0 million credit facility - Entered into a credit agreement for up to **$50.0 million** with Perceptive Credit Holdings in May 2024, drawing an initial **$15.0 million**[47](index=47&type=chunk) - Issued warrants to purchase up to **400,000** ordinary shares at an exercise price of **$4.9992** per share in connection with the new credit agreement[48](index=48&type=chunk) - Terminated a **CHF 5.0 million** credit facility with Credit Suisse and entered into a new **CHF 0.1 million** facility in April 2024[53](index=53&type=chunk) [Share-Based Compensation](index=17&type=section&id=10.%20Share-based%20compensation) Share-based compensation expense for Q1 2025 totaled $3.8 million, a slight increase from $3.7 million in Q1 2024, with general and administrative functions accounting for the largest portion Share-Based Compensation Expense by Function (USD thousands) | Department | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $1,005 | $905 | | Selling and marketing | $291 | $194 | | General and administrative | $2,539 | $2,615 | | **Total** | **$3,835** | **$3,714** | [Related Party Transactions](index=17&type=section&id=11.%20Related%20party%20transactions) Total compensation for key management personnel and non-executive directors increased to $4.8 million in Q1 2025 from $4.1 million in the prior-year period, driven by higher salaries and share-based compensation Key Management Compensation (USD thousands) | Compensation Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Salaries and other short-term benefits | $1,771 | $1,169 | | Pension costs | $71 | $70 | | Share-based compensation expense | $2,921 | $2,811 | | **Total** | **$4,763** | **$4,050** | [Events After the Reporting Date](index=17&type=section&id=12.%20Events%20after%20the%20reporting%20date) The company evaluated events occurring after the reporting period up to May 6, 2025, and identified no material subsequent events requiring recognition or disclosure - There were no material subsequent events to report after the March 31, 2025 reporting date[59](index=59&type=chunk)

Company Overview and Platform - SOPHiA GENETICS's AI platform SOPHiA DDM is used by over 800 healthcare institutions globally [7] - The platform analyzes over 350,000 patients per year and has analyzed over 2 million profiles since inception [8, 21] - The company has invested over $450 million since inception in its AI platform [21] Market Trends and Data Analysis - Healthcare data accounts for 30% of all data generated globally [17] - In 2024, SOPHiA DDM performed over 350,000 genomic analyses, with over 93,000 in Q1 2025 [33] - Total data processed on SOPHiA DDM has seen compounded growth of over 50% since 2021 [46] Financial Performance and Outlook - SOPHiA GENETICS' revenue for 2024 was $65.2 million [68] - The company projects revenue between $72 million and $76 million for 2025, representing approximately 10% to 17% year-over-year growth [71] - Adjusted gross margin was 72.8% in 2024 and is expected to expand slightly in 2025 [71] - The company had a cash balance of $68.5 million as of Q1 2025 [76]

Core Insights - SOPHiA GENETICS reported a strong start to 2025 with a year-over-year revenue growth of 13%, or 15% on a constant currency basis, driven by new business signed in 2024 [3][7] - The company achieved a record adjusted gross margin of 75.7%, up 520 basis points year-over-year, indicating effective cost management and operational efficiency [3][7] - The company continues to focus on long-term growth prospects, particularly in the U.S. market, where revenue from core genomics customers grew over 30% [3][13] Financial Performance - Revenue for Q1 2025 was $17.8 million, reflecting a 13% increase from $15.8 million in Q1 2024 [7][35] - Adjusted EBITDA loss improved by 24% year-over-year to $9.8 million, demonstrating progress towards profitability [7][33] - The company reaffirms its full-year revenue guidance of $72 million to $76 million, representing a growth of approximately 10% to 17% compared to FY 2024 [7][13] Business Highlights - SOPHiA DDM™ platform performed 93,000 analyses in Q1 2025, marking an 11% year-over-year volume growth [8] - The company onboarded 33 new core genomics customers in Q1 2025, up from an average of 23 customers per quarter in 2024 [8] - Significant demand for new applications, including the Liquid Biopsy application MSK-ACCESS®, has led to a healthy pipeline of over 60 identified opportunities [9][10] Market Expansion - The company expanded its collaboration with AstraZeneca to accelerate the deployment of MSK-ACCESS® globally, now involving 30 sponsored institutions [8] - New customers were signed across various geographies, including notable institutions in Belgium, Canada, and Malaysia [8][9] - The U.S. market continues to show strong business growth, with a focus on operational excellence and sustainable growth strategies [10][11]

Core Insights - SOPHiA GENETICS announced an expansion of its collaboration with AstraZeneca to enhance the global deployment of MSK-ACCESS® powered with SOPHiA DDM™, extending its reach to 30 clinical institutions in 2025 [1][3] Group 1: Collaboration and Expansion - The collaboration aims to accelerate the deployment of innovative liquid biopsy testing, which detects actionable genomic alterations from a single blood draw [2][3] - The expanded rollout will contribute to AstraZeneca's global real-world evidence initiatives and validate the clinical impact of decentralized liquid biopsy testing [3][4] Group 2: Technology and Performance - MSK-ACCESS® powered with SOPHiA DDM™ utilizes advanced algorithms to analyze circulating tumor DNA (ctDNA), supporting real-time cancer monitoring and treatment selection [2][4] - Data presented at AACR demonstrated the consistent accuracy and precision of the decentralized test across various laboratory settings, addressing historical site-to-site discordance issues [4][5] Group 3: Strategic Vision - The collaboration reflects a significant step toward scaling next-generation oncology diagnostics globally, with a shared ambition to enhance accessibility and impact of liquid biopsy technologies [5]

Company Overview - SOPHiA GENETICS is a cloud-native software company focused on data-driven medicine, utilizing AI to enhance patient care for cancer and rare disorders globally [3]. - The company has developed the SOPHiA DDM™ Platform, which analyzes complex multimodal data, including genomics, radiomics, clinical, biological, and digital pathology data, to provide real-time actionable insights [3]. Financial Results Announcement - SOPHiA GENETICS will release its financial results for the first quarter of 2025 before U.S. markets open on May 6, 2025 [1]. - A conference call to discuss the financial results and business outlook will take place at 8:00 a.m. EDT / 2:00 p.m. CET on the same day [1]. Investor Relations - The conference call will be available via a live webcast on the SOPHiA GENETICS Investor Relations Website, with a replay accessible after the event [2].

Core Insights - SOPHiA GENETICS has achieved a significant milestone by analyzing over two million genomic profiles on its AI-powered analytics platform, SOPHiA DDM™ [1][2][3] - The rapid growth from one million profiles in 2022 to two million in less than three years highlights the increasing trust in the platform and the transformative role of AI in healthcare [2][4] Company Overview - SOPHiA GENETICS is a cloud-native healthcare technology company focused on expanding access to data-driven medicine, particularly for cancer and rare disorders [10] - The SOPHiA DDM™ platform integrates hundreds of millions of data points across various health dimensions, enhancing its impact on precision medicine [3][4] Platform Capabilities - The SOPHiA DDM™ platform is utilized by 800 healthcare institutions across 72 countries, making it one of the most comprehensive sources of real-world intelligence in precision medicine [2] - The platform analyzes thousands of new oncology and rare disease cases daily, continuously refining its AI capabilities based on real-world data [2][4] Impact on Healthcare - The platform enables faster and more accurate treatment decisions for patients, as evidenced by testimonials from healthcare professionals who have benefited from its use [6][8] - SOPHiA GENETICS's technology allows for effective genetic analyses, including exome sequencing and hereditary cancer testing, without compromising accuracy [6][8] Global Reach and Collaboration - The company collaborates with hospitals and research institutions worldwide, contributing to advanced cancer diagnostics and improving patient care in underserved communities [5][8] - SOPHiA GENETICS will celebrate its milestone at the NVIDIA GTC AI Conference, showcasing its advancements in data-driven medicine [8]

Financial Data and Key Metrics Changes - Total revenue for 2024 was $65.2 million, representing a year-over-year growth of 4% [50] - Adjusted gross margin improved to 72.8%, up 60 basis points from the previous year [55] - Adjusted operating loss for 2024 was $44.8 million, improving by 20% year-over-year [56] - Total cash burn for 2024 was $58 million, up 5% from the previous year [57] Business Line Data and Key Metrics Changes - Clinical revenue grew 23% in the U.S. in 2024, with analysis volume increasing by 26% [16] - The company signed a record 92 new core genomic customers in 2024, with 35 new customers implemented in Q4 alone [13][14] - Hematology was the top-performing application in 2024, followed by Solid Tumors and rare disease applications [29] Market Data and Key Metrics Changes - North America and Asia Pacific saw significant growth, with volume growth of 33% and 40% year-over-year, respectively [27] - Latin America experienced a decline due to the acquisition of a top customer, but the company has since regained this business [28] Company Strategy and Development Direction - The company aims to expedite implementation times for new customers and expand usage across accounts as a key growth driver [12] - Focus on growing new applications, MSK-ACCESS and MSK-IMPACT, which are expected to significantly impact clinical and BioPharma businesses [20][21] - Continued investment in product upgrades and launches, including Enhanced Exomes and improvements to Liquid Biopsy offerings [31][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the BioPharma sector due to tightened budgets but expressed optimism for recovery [8][76] - The company expects to report full-year revenue between $72 million and $76 million for 2025, representing 10% to 17% growth [59] - Management is confident in achieving adjusted EBITDA breakeven by the end of 2026 [67] Other Important Information - The company analyzed a record 352,000 patients on SOPHiA DDM in 2024, benefiting from a global reach of nearly 800 healthcare institutions [10] - The company has access to an additional $35 million of capital through a financing line with Perceptive Advisors [67] Q&A Session Summary Question: What are you seeing in terms of BioPharma funding and recovery trends? - Management noted that the BioPharma environment has been challenging, but they are seeing improved momentum in the pipeline and activity rates with pharma [75][80] Question: What indicators give you line of sight into customer volumes? - Management highlighted the backlog of signed contracts and the strong expansion of existing accounts as indicators of future customer volumes [87][89] Question: What is embedded in your ASP assumptions for 2025? - Management indicated that while volume growth is expected to be strong, ASPs may be impacted by the loss of certain pharma-linked business, but new products are expected to help pull ASPs back up [100][101]

Group 1 - SOPHiA GENETICS reported a quarterly loss of $0.23 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.24, and an improvement from a loss of $0.37 per share a year ago, indicating an earnings surprise of 4.17% [1] - The company generated revenues of $17.73 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.36% and showing an increase from $17.05 million in the same quarter last year [2] - SOPHiA GENETICS shares have increased by approximately 16.3% since the beginning of the year, contrasting with a decline of 0.5% in the S&P 500 [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$0.21 on revenues of $17.5 million, while for the current fiscal year, the estimate is -$0.81 on revenues of $74.96 million [7] - The Zacks Industry Rank places Medical Info Systems in the top 28% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than a factor of 2 to 1 [8]

Financial Performance and Losses - The company has incurred net losses since inception and expects to continue incurring losses for the foreseeable future, indicating a risk of never achieving profitability[31]. - The company reported net losses of $79.0 million for the year ended December 31, 2023, and $62.5 million for the year ended December 31, 2024, with an accumulated deficit of $440.3 million as of December 31, 2024[179]. - The company expects to continue incurring net losses as it invests in research and development, particularly for the SOPHiA DDM Platform, and expanding marketing efforts to drive new customer adoption[180]. - The company may need to raise additional capital to fund operations and further develop its SOPHiA DDM Platform, with potential dilution of shareholder ownership if raised through equity[182]. - The company has incurred substantial cash expenditures since inception, indicating a capital-intensive research and development process[182]. - The company anticipates fluctuations in operating results, which may not meet investor expectations, potentially affecting share price[188]. - The company is focused on reducing costs to achieve sustainable gross margins, but faces challenges from rising operational costs and the need for increased capacity[190]. Market and Competitive Landscape - The SOPHiA DDM Platform offers a broad range of genomics applications across various disease areas, but expanding features and applications poses significant risks and challenges[28]. - The company faces competition from many sources, some with greater financial resources, which may hinder its ability to compete successfully[26]. - The company faces competition from established healthcare technology companies with greater financial resources and market share, which may hinder its ability to compete effectively[79]. - The company faces challenges in penetrating existing markets and expanding into new ones, which could adversely affect revenues and operations[48]. - The commercial success of the SOPHiA DDM Platform relies on significant market acceptance, which is uncertain and influenced by various factors[44]. - Market acceptance depends on the safety, accuracy, ease of use, and perceived advantages of the SOPHiA DDM Platform compared to competitors[45]. - Estimates of the addressable market for the SOPHiA DDM Platform may be smaller than anticipated, impacting business and financial results[49]. Regulatory and Compliance Risks - There is uncertainty regarding the coverage and reimbursement status of newly developed applications and products, which could limit the commercial potential of the SOPHiA DDM Platform[26]. - The company intends to seek regulatory clearance for its applications and products as IVD applications, but the approval process is expensive, time-consuming, and uncertain[101]. - Regulatory authorities have substantial discretion in the clearance and approval process, which may delay or prevent the launch of applications and products[103]. - The company may incur significant additional costs if required to conduct further studies for regulatory approval[103]. - Failure to comply with FDA regulations could result in enforcement actions, including product recalls and revocation of marketing authorization[104]. - The company is subject to various risks associated with international operations, including economic instability and regulatory compliance challenges, which could impact future expansion and revenue[100]. - The FDA's final rule on LDTs, effective by May 6, 2028, will require premarket review, increasing commercialization costs and potentially reducing demand for RUO applications and products[105]. - The evolving regulatory landscape for AI/ML technologies may impose additional compliance costs on the company[110]. - The company must navigate varying regulatory requirements across jurisdictions, which could delay product introductions[115]. - Noncompliance with privacy policies could lead to significant liability and reputational harm[123]. - The company faces significant legal and compliance risks related to various federal healthcare laws, including the Anti-Kickback Statute and the Stark Law, which could lead to substantial penalties and operational disruptions[126]. - Compliance with healthcare regulations is costly, and any violations could result in administrative, civil, or criminal penalties, potentially harming the company's financial condition and operations[127]. Cybersecurity and Data Privacy - The company faces risks related to cybersecurity and data privacy breaches, which could result in additional costs and harm to its brand[26]. - Cybersecurity breaches could result in significant liabilities and harm to the company's brand, affecting revenue and customer retention[85]. - The company is increasingly dependent on information technology, which raises the risk of cybersecurity incidents, including deliberate attacks and unauthorized access to systems[86]. - Cybersecurity threats could disrupt operations, compromise data integrity, and lead to significant business disruptions if not effectively managed[88]. - The company carries cybersecurity insurance, but there is no assurance that potential losses will be covered or will not exceed policy limits[88]. Operational Dependencies and Risks - The company is highly dependent on its senior management team and qualified personnel, and failure to retain or attract such personnel could harm its business[26]. - The company must maintain and continuously improve the performance, security, and reliability of its platform, as poor performance could adversely impact customer satisfaction and revenue[30]. - The company is expanding its sales and marketing capabilities, but challenges in recruiting and training personnel may hinder revenue growth[40]. - The company relies on strategic relationships with third-party providers, and failure to maintain these relationships could impact revenue growth[42]. - The company relies on third-party manufacturers for the supply and production of its products, which may expose it to risks if agreements are terminated or not renewed[68]. - The company is dependent on third-party service providers for hosting its SOPHiA DDM Platform, and interruptions could lead to lengthy service disruptions and additional expenses[65]. - The performance of third-party distributors is crucial, and any disruption in these relationships could materially affect operations[63]. - The company relies on third parties for conducting multimodal clinical studies, and failures in these studies could impact regulatory submissions and commercial activities[71]. - The company faces risks related to shipping and warehousing providers, which could affect timely product delivery and operational costs[73]. Intellectual Property and Legal Risks - The company’s ability to protect its intellectual property is uncertain, with potential challenges in obtaining and maintaining patents that could allow competitors to develop similar products[135]. - The patent application process is complex and may not yield the desired protection, impacting the company's competitive advantage in the market[139]. - The company may face challenges in patent rights, as others may have filed similar patent applications that could affect its ability to commercialize technology[140]. - The issuance of patents does not guarantee their validity or enforceability, and the company may be involved in legal proceedings that could limit its patent rights[142]. - The company may be subject to third-party claims of patent infringement, which could adversely affect its operations and financial condition[149]. - The biotechnology industry is prone to extensive litigation regarding patents, increasing the risk of needing licenses from organizations that may refuse reasonable terms[152]. - Legal disputes over intellectual property could result in significant costs and distract management from core responsibilities, impacting overall productivity[145]. - The company relies on licenses from third parties, such as Normandie Valorisation, for certain products, and termination of these agreements could adversely affect its ability to commercialize those products[155]. - Future license agreements may impose significant royalty obligations, which could impact the company's profitability if it fails to develop and commercialize successful applications and products[156]. - Disputes over royalty payments and obligations under license agreements could lead to increased financial liabilities and distract management from core business activities[158]. Corporate Governance and Structure - SOPHiA GENETICS SA was incorporated on March 18, 2011, as a Swiss stock corporation[224]. - The company is classified as a foreign private issuer, exempt from certain U.S. domestic public company regulations[216]. - SOPHiA GENETICS may lose its foreign private issuer status by June 30, 2025, requiring compliance with more extensive U.S. reporting requirements[219]. - The company is currently an emerging growth company, allowing it to benefit from reduced reporting obligations[220]. - If the market value of its ordinary shares held by non-affiliates exceeds $700 million or total annual gross revenues reach $1.235 billion, it will lose its emerging growth company status[221]. - The company holds a substantial amount of cash, which may affect its classification as a passive foreign investment company (PFIC)[214]. - There is uncertainty regarding the enforceability of U.S. court judgments in Switzerland, which may impact investor rights[210]. - The company's articles of association contain anti-takeover provisions that could deter beneficial acquisitions[212]. - SOPHiA GENETICS is subject to different corporate governance standards compared to U.S. domestic companies listed on Nasdaq[218]. - The company may incur significant legal and compliance costs if it loses its foreign private issuer status[219].

Revenue and Growth - Revenue in 2024 was softer than expected, but the company laid a strong foundation for future success through new product launches and a record number of new customers[11]. - The company signed a record 92 new core genomics customers in 2024, including top institutions like Mount Sinai and Mayo Clinic, contributing to a 23% growth in clinical revenue in the US[14][15]. - The company impacted 352,000 patients in 2024, contributing to a total of over 1.9 million patients since inception[28]. - The number of active customers grew from 182 to over 810 from December 31, 2016, to December 31, 2024, with genomic profiles analyzed increasing from approximately 80,000 to about 1,900,000[158]. Financial Performance - Adjusted gross margin improved to 72.8% in 2024, an increase of 60 basis points year-over-year, while adjusted operating loss improved by 20%[26]. - The company expects to approach adjusted EBITDA breakeven by the end of 2026 and achieve positive adjusted EBITDA in the second half of 2027[27]. - Approximately 70% of revenue from clinical customers in 2024 was generated from oncology applications, while 30% came from other disease areas[73]. - The revenue churn rate for customers accessing the platform through dry lab and bundle access models is 4% for the year ending December 31, 2024[163]. Product and Service Offerings - The new liquid biopsy offering, MSK-ACCESS, was adopted by 34 customers across 20 countries within 10 months of its launch[19]. - The company launched SOPHiA UNITY, a data-driven consortium aimed at advancing cancer research and drug development[21]. - SOPHiA CarePath, launched in 2022, integrates data across multiple modalities, enhancing the monitoring of cancer patients and tumor progression[63]. - The SOPHiA DDM Platform supports multimodal data analytics, integrating clinical, biological, genomics, and radiomics data, with plans to include additional modalities like digital pathology and proteomics[91]. Market Opportunities - The total addressable market for current commercial clinical applications is estimated to be approximately $25 billion, while for biopharma applications it is around $15 billion[45]. - The total addressable market opportunity for clinical and biopharma applications is estimated at $40 billion globally in 2024, with approximately $9 billion in the United States[130]. - The total addressable global clinical market opportunity for current offerings is estimated at $25 billion in 2024, with oncology being the largest market segment[133]. - The total addressable biopharma opportunity for current offerings is estimated at $15 billion in 2024, covering Discovery, Development, and Deployment segments[139]. Technology and Innovation - The SOPHiA DDM Platform is designed to grow a global collective intelligence by analyzing pseudonymized data and sharing insights among customers[44]. - The platform is capable of generating approximately 30,000 new genomic profiles monthly, indicating a robust growth in data capture[64]. - The company has developed AI/ML-powered segmentation algorithms for radiomics, capable of analyzing data from various imaging technologies, including CT and MRI[95]. - The platform's architecture allows for flexible and scalable data analysis, supporting multiple data modalities and regional data warehouses[66]. Partnerships and Collaborations - A partnership with NVIDIA aims to improve the speed and efficiency of healthcare data analysis, potentially delivering insights up to 10 times faster[23]. - The company collaborates with 11 laboratories across 9 countries to provide integrated access services for the SOPHiA DDM Platform as of December 31, 2024[177]. - The company has ongoing R&D projects with major cloud providers, including Microsoft Azure, Amazon Web Services, and Google Cloud Platform, enhancing flexibility and managing vendor risks[175]. Sales and Marketing Strategy - The direct sales team consists of over 96 field-based representatives with a presence in 58 countries, supplemented by distributor partners in 46 countries[46]. - The company employs a "land and expand" model to increase utilization within its clinical customer base, facilitating the deployment of additional testing solutions[166]. - The company has shifted its sales strategy to target smaller, repeatable business opportunities to expedite the sales cycle in biopharma services[173]. Regulatory and Intellectual Property - The company aims to pursue additional IVD status and FDA approval for specific solutions in the future[73]. - The company has 8 issued U.S. patents and 32 pending U.S. patent applications as of December 31, 2024, with foreign patents and applications in multiple jurisdictions[184]. - The company owns 11 registered U.S. trademarks and approximately 134 registered foreign trademarks as of December 31, 2024, aimed at protecting its brand and products[189]. - The company’s intellectual property strategy includes a combination of patents, trademarks, and trade secrets to protect its technology and competitive position[181]. Customer Engagement and Satisfaction - The Net Promoter Score reached 67, with 58% of customers using two or more applications, up from 56% the previous year[17]. - Regular platform updates occur approximately every three weeks, providing new content and improvements to existing applications[159]. - The platform's ease of use and decentralized nature facilitate rapid knowledge generation and variant discovery among users[87].