SOPHiA GENETICS Q3 Earnings Call Highlights

Key Points

• Q3 revenue rose 25% year over year to $24.3 million, driven by 45% growth in North America, record platform volume of 118,000 analyses and expanding adoption of liquid biopsy testing.
• Customer and product momentum strengthened: core genomics customers increased to 551, net dollar retention reached 118%, and liquid biopsy analyses more than doubled year over year to 4,200.
• Profitability improved, with adjusted EBITDA loss narrowing 31% to $6.1 million. Management expects 2026 revenue at the upper end of its $94 million-$96 million guidance range and continues to target positive adjusted EBITDA in the second half of 2027.

SOPHiA GENETICS NASDAQ: SOPH reported third-quarter 2026 revenue growth of 25% year over year, supported by expansion in the U.S., growing adoption of liquid biopsy testing and contributions from biopharma collaborations. The company also narrowed its adjusted EBITDA loss and said it expects full-year revenue to reach the upper end of its prior guidance range.

Third-quarter revenue totaled $24.3 million, compared with $19.5 million a year earlier. Revenue increased 26% on a constant-currency basis. Platform analysis volume reached a record 118,000 analyses, up 19% from the prior-year period.

“Q3 was another strong quarter for SOPHiA,” Chief Executive Officer Ross Muken said, citing demand for the company’s platform, new product adoption and commercial progress with biopharma customers.

U.S. Growth and Global Customer Activity

North America was a primary contributor to growth, with revenue in the region rising 45% year over year. Muken said U.S. revenue grew 41%, making the country the company’s largest market globally. Recently signed accounts, including Northwell, Igenomix and a major West Coast health system, are expected to ramp meaningfully during the fourth quarter and into 2027.

During the quarter, SOPHiA GENETICS signed PathGroup for its Solid Tumor and HemOnc applications and the University of Arkansas for HemOnc. The University of North Carolina Medical Center, an existing customer, expanded its use of the platform across HemOnc, Hereditary Cancer and Rare Disorders testing.

Muken said rising reimbursement rates, improving denial rates and declining sequencing costs have created more favorable economics for hospitals and laboratories to launch genomic testing capabilities in-house. He said the company’s platform enables institutions to retain control of patient data while offering their own testing services.

Core genomics customers totaled 551 as of Sept. 30, up from 488 a year earlier. The company signed 30 new logos during the quarter. CFO George Cardoza said both the clinical and biopharma businesses have net new business pipelines exceeding $100 million.

Net dollar retention increased to 118% from 108% in the prior-year quarter, while annualized revenue churn remained below 1%, according to Cardoza.

Applications and Liquid Biopsy Adoption

Growth extended across several testing applications. HemOnc volumes increased 28% year over year, Rare Disorders volumes rose 29%, and Solid Tumor testing grew 30%. Cardoza said Solid Tumor growth was driven in part by adoption of the company’s MSK-IMPACT Flex comprehensive genomic profiling test.

The company signed multiple customers for MSK-IMPACT Flex in the quarter, including AOU Pisana in Italy, Géntodos in Mexico and Ruhr University Bochum in Germany. Muken said the product’s availability across multiple platforms, lower assay costs and ability to identify complex mutations have contributed to customer interest.

Liquid biopsy volume was 4,200 analyses in the quarter, more than doubling from the prior year and rising 41% sequentially from the second quarter. SOPHiA GENETICS has signed more than 85 institutions to its MSK-ACCESS liquid biopsy application, including six during the third quarter.

New MSK-ACCESS customers included University Hospital Augsburg in Germany, Agilus Diagnostics in India and Hanusch Krankenhaus in Austria. The company is investing in medical affairs capabilities to develop clinical evidence, support reimbursement discussions and promote liquid biopsy adoption in Europe, Asia and Latin America.

Muken said liquid biopsy remains at an early stage of adoption outside the U.S. and that the company is shifting from an initial awareness and implementation phase toward broader clinical usage and scaling.

Biopharma Collaborations Expand

SOPHiA GENETICS also announced a new collaboration with a top-10 biopharma company to develop a multimodal artificial intelligence predictor intended to identify bladder cancer patients most likely to benefit from immunotherapy. The project involves building two predictive models focused on patient response to a targeted therapy.

The collaboration follows two previously announced companion diagnostic programs with AstraZeneca. One program is designed to develop a decentralized companion diagnostic for prostate cancer and will incorporate Myriad Genetics’ prostate cancer-specific genomic instability score capability. The second will use a hematological oncology application to support a blood cancer therapy.

Muken said biopharma companies are increasingly using the company’s global network and data capabilities for patient selection, stratification, companion diagnostics, foundational model development, real-world evidence and sponsored deployment of tests.

Management said biopharma is now contributing to growth and is expected to remain an accelerator in future years. In response to analyst questions, Muken said the company sees the biopharma business as a potential driver of growth in 2027, while noting that the AstraZeneca programs remain in their early stages.

Margins, Losses and Outlook

Gross profit rose 23% to $15.9 million, while gross margin was 65.7%, compared with 66.3% a year earlier. Adjusted gross margin was 72.8%, compared with 73.1% in the prior-year period.

Total operating expenses increased to $33.8 million from $30.8 million. On an adjusted basis, operating expenses were relatively flat at $23.7 million, compared with $23 million a year earlier. Research and development expenses declined 18% year over year, while adjusted general and administrative expenses were roughly flat. Sales and marketing expenses increased slightly as the company added select North American personnel.

The operating loss was $17.8 million, compared with $17.9 million in the third quarter of 2025. Adjusted EBITDA loss improved 31% to $6.1 million from $8.8 million a year earlier. Cardoza said the company converted nearly 60% of incremental revenue into adjusted EBITDA improvement during the quarter.

The company ended the quarter with $94 million in cash. It reaffirmed its expectation to reach positive adjusted EBITDA in the second half of 2027.

SOPHiA GENETICS expects full-year 2026 revenue at the upper end of its previously issued $94 million to $96 million range. The company reaffirmed its full-year adjusted EBITDA loss outlook of $29 million to $32 million, compared with a $41.5 million loss in 2025. Management said foreign-exchange movements late in the third quarter could create a headwind to reported fourth-quarter revenue if current rates persist.

About SOPHiA GENETICS (NASDAQ:SOPH)

SOPHiA GENETICS SA is a healthcare technology company that develops data-driven solutions for genomic medicine. Its cloud-based platform uses artificial intelligence, machine learning and advanced analytics to help healthcare organizations analyze and interpret complex biological and clinical data.

The company's primary offering, the SOPHiA DDM platform, supports next-generation sequencing workflows, including data management, quality control, genomic analysis, variant interpretation and reporting.

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