Sophia Genetics(SOPH) - 2025 Q1 - Quarterly Report

Unaudited Interim Condensed Consolidated Financial Statements 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 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 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 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 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] - 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] Interim Condensed Consolidated Statements of Cash Flows 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][23][27] Notes to the Unaudited Interim Condensed Consolidated Financial Statements 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 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] - 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][24] - In July 2024, the company eliminated the requirement to maintain a $15 million designated cash account for its D&O insurance policy[22] Fair Value 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 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] Segment Reporting 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] Revenue 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 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] - The company's largest customer accounted for 16% of the accounts receivable balance as of March 31, 2025[44] Loss Per Share 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 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] Borrowings 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] - 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] - 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] Share-Based Compensation 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 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 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]