Sophia Genetics Sa ((SOPH)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for SOPHiA GENETICS SA painted a mixed picture of the company’s performance over the past year. While the company celebrated significant achievements in customer acquisition and cost management, these were tempered by challenges in the BioPharma sector and a decline in Latin America. Despite flat revenue growth, the company remains optimistic about future prospects, particularly in the U.S. market and with new applications like MSK-ACCESS and MSK-IMPACT.
Record Number of New Customers
SOPHiA GENETICS achieved a milestone in 2024 by signing 92 new core genomic customers, including 31 in the fourth quarter alone. This record-breaking achievement underscores the company’s ability to attract new business and expand its customer base, setting a strong foundation for future growth.
Improvement in Adjusted Operating Loss
The company reported a 20% year-over-year improvement in its adjusted operating loss, alongside a 60 basis point increase in adjusted gross margin. These improvements highlight SOPHiA GENETICS’ effective cost management strategies and operational efficiencies.
Strong U.S. Market Performance
The U.S. market proved to be a bright spot for SOPHiA GENETICS, with clinical revenue growing by 23% in 2024 and analysis volume increasing by 26%. This robust performance demonstrates the company’s successful penetration and expansion in a key market.
MSK-ACCESS and MSK-IMPACT Applications Launch
The launch of MSK-ACCESS and MSK-IMPACT applications marked a significant development for SOPHiA GENETICS. MSK-ACCESS, in particular, has been adopted by 34 customers across 20 countries, showcasing the global appeal and potential of these new applications.
Expansion into Japanese Market
SOPHiA GENETICS expanded its footprint into the Japanese market through a collaboration with Genesis Healthcare. This strategic move aims to accelerate access to genomic testing in Japan, further broadening the company’s international reach.
BioPharma Revenue Decline
Despite overall achievements, the company faced a $4 million decline in BioPharma-related revenue in 2024. This downturn highlights the challenges within the BioPharma sector that SOPHiA GENETICS needs to address moving forward.
Challenges in Latin America
Performance in Latin America suffered due to the acquisition of a top customer by another lab, leading to a notable decline. This challenge underscores the competitive dynamics in the region and the need for strategic adjustments.
Flat Revenue Growth
SOPHiA GENETICS reported a total revenue growth of only 4% for 2024, falling short of long-term growth expectations. This flat growth indicates areas where the company must focus on driving higher performance.
Cash Burn Increase
The company’s cash burn increased by 5% to $58 million in 2024, primarily due to exchange rate differences. This increase in cash burn highlights the financial pressures the company faces and the importance of managing expenses.
Forward-Looking Guidance
Looking ahead, SOPHiA GENETICS projects full-year revenue for 2025 to be between $72 million and $76 million, representing a growth rate of 10% to 17%. This growth is expected to be driven by volume, with a focus on accelerating customer implementations and expanding the use of applications like MSK-ACCESS and MSK-IMPACT. The company aims to capitalize on its momentum in the U.S. market and continue its global expansion.
In conclusion, SOPHiA GENETICS’ earnings call reflected a balanced view of achievements and challenges. While the company celebrated record customer acquisitions and improvements in cost management, it also faced hurdles in the BioPharma sector and Latin America. Looking forward, the company is optimistic about its growth prospects, particularly in the U.S. and with innovative applications, setting the stage for a potentially strong performance in 2025.