- Earnings call transcript Q3 2022

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Operator

Good morning, everyone, and welcome to the SOPHiA GENETICS Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. event recorded. today's note also is being Please At over Investor to I'd like Relations. the floor to turn Jennifer this time, Pottage, Head of Ma'am, ahead. please go

Jennifer Pottage

SOPHiA earnings and QX the Jennifer Head morning thank Relations for I'm us Good at Investor SOPHiA. you Pottage, and fiscal My call. on XXXX of name is joining GENETICS

Philippe our Dr. Medical Officer; Chief are today Co-Founder Chief me our Officer. Camblong, our and Ross Menu, Muken, Chief Joining Jurgi Executive Financial Officer; Dr. and

that I to within current would statements be like could U.S. Before management we subject actual you call forward-looking will on views or statements remind are projected. federal materially get are that which the cause results to this during management's differ started, those assumptions are based These making from risks to material uncertainties of events and securities that laws. scope and

in risks filed obligation included information otherwise. statements release will note, November be of available information and uncertainties Jurgi? events contains or disclaims X-K Form Investor regarding copy to the Additional future Jurgi. our its earnings section. the the of site or the law, because call any a required Relations I'll of the SOPHiA information, turn accurate call This this of or intention replay revise statements X, GENETICS update by only the cautionary the as and conference both And is Please time-sensitive of forward-looking over and these broadcast, statements Exhibit XX.X XXXX. call now, Web and on whether SEC. Except forward-looking today section new on entitled any as to regarding are with report in

Jurgi Camblong

this the and analytics the platform trusted may robust institutions technology, the with that lie operational in that positioned to period of a commercial discipline steady adoption a great today, one a be on will grew that differentiated We pleased We excluding Total ahead. joining precision cloud-native demonstrates organic customer firmly challenging from I consumption as software and shows the and us commitment around we well by revenue morning. believe from and as currency share strong SOPHiA on growth environment basis, impact negative reported our remains drive improved our for by call traction, economic the the relates still improving third even forward-thinking sustainable to global scenarios constant hello, appreciate Thank market. that start world-class demonstrating on The block. reviewing an preferred accelerating growth our you, progress XX% leverage, operating is the our securing today's leader a impact the of we are our This proving and for healthcare as foreign quarter everyone. results the a to rates in off medicine I'm and continues are exchange new operating trends. thrive it results. under we're Jen, quarter to spot as grow you our year-over-year supporting to call to growth revenue. to team despite COVID-related in platform combination

biopharma go before will our Next, increased regarding business Financial And like who through our more year our updates full finally, will you strategy. in and posted our joined it market, to Ross York. would on, in thank a Chief we highly and of little discuss Officer, money But financial many ago New a our will I of our great fantastic Dr. outlook over some detail. those I would I see partnerships. so strategic hosted Medical update QX Menu, which, After by It in you Day first discussing Muken, with Investor in was month go event, results who to encourage person Philippe from an highlights hear there. virtually and us of Officer, Chief I expansion off will traction who was Relations at finish so the grow we the our and of you a we it watch to are, our sustainably. on sell, to make Investor understand we better we couldn't site innovate you how a how as who how those the replay good it resource is

customer get to the with highlights, new Now QX back adoption. starting off let's the

to more a proved high by reiterating spending on momentum strategy we centralized remain clinical during our to quarter, time As company which robust very validated where chemical sales region. activity period the accelerating in to The end, penetration with new this of relationships last our of We're logos region our in market our customers. spending resilient. we growing global in customers sales on centers academic that with added remains platform's estimated am building of customers represents network. highly increase was at our growth important potential QX. my to to business labs. an focused It inflecting Much large travels I with onboarding while growth customers progress $X our diversify XXXX, and demand the new focused largest growth our quarter offering, recent balanced that medical This To begs see time momentum a to is continue overview our in face-to-face pleased with team, Steady further developments. much one materially of consistent between North our priority, America. respect new with of million we positive reporting long-lasting XX and SOPHiA's fact and like universal customer demonstrates nature go be a level execution advancing the be with continues basis. global on and a

countries several Latin Beyond the North America data vision quarter, third experienced of medicine new which driven the won them in the first globally. am and the highlight validates Europe, the are in clinical labs which in respective deals of of practice SOPHiA's of institutions are India, UniPath highlight HRD also pleased Mexico. important in America, to Kong's of solution, advancing the National to they we exciting. These also and Prince the as include one clinical in two laboratory I to Asia research Institute and Medicine, Genomic largest Hong incredibly Pacific adopt deals Wales premier are and the a Among which Hospital, MedGenome, momentum is our of leading institutions the of

ago presented solution. get their you of conference the to SOPHiA's will thrilled through in talk Philippe about that each a are will on SOPHiA's with call, also Later the weeks significant at of who two of countries hear We power Oncology our utilization of the solution. annual new door foot initial HRD of clinical from validates results European we Society HRD the milestone Gynaecological with the these

compelling crucial as growth it adoption as We are this we by relationship to help sales companies. of encouraged strategy of employ Broadening many and platform. customer model, further proof and will that result a typically our existing point land-and-expand highly is deepening our view another our software

about Our and approach range DDM has full the ensuring been a customers of SOPHiA that that recognize new platform applications existing provide. always can

platform of the customers year, number continue total Total third The As XXX customers value This XX,XXX offset up slowdown benefit representing in of year in related third the to analysis result recurring our SOPHiA compared from continued core volume third their customers from platform analysis utilization was this of by growth analysis DDM, to the in in of the grew approximately XXX of stems growth volume. quarter, quarter increases. flat platform being quarter from period. XXXX. the COVID-XX to prior

approximately period. However, grew excluding the COVID-related in volumes, XX% platform analysis

very you quarter strong and LATAM we will in underperformed has model's quarter, in competitive while and more mainly with the third volume oncology tumors. and performed expanding from our strong to growth environment. and portfolio utilization, continued landing also momentum and in challenging notably balanced Furthermore, continued note digit from APAC, now. cross-application Geographically, customers business Philippe? triple by its saw and due analysis menu started during volume well EMEA offerings, a HRD take we contribution platform expanding by the focusing resilience our Our report growth their of analysis happy conjunction was solid I to driven Philippe am through remain and which challenges underline Turkey. on first in In detail a strength enhancing macroeconomic new NORAM in on

Philippe Menu

and call, the generation future I specific are today's of highlight all with progress our Menu. offerings incorporating of Philippe towards to the I we is on My excitement GENETICS. new expansion expansion Thank At our focused laser our and that new area our be development around SOPHiA offerings. would of menu in are in as accelerate the we teams three applications, updates respect morning new modalities I'm by our SOPHiA, There features, our services. and the you, name discussing On you. great at solutions will feel We driving users across menu saw to pace on of to good providing new data of Chief like product third our the menu quarter. the Jurgi, this Medical frequent technology. with innovation efforts today progress and Officer efforts recent of

Kettering new solution, First, platform. with which Sloan earlier deployed the latest our Cancer about DDM Memorial on Center; third, the SOPHiA's second, our call; module and HRD CarePath, heard SOPHiA on collaboration groundbreaking you Jurgi SOPHiA speak

our Oncology setting. our concordant the solution solution. of clinical start Two European at the highly is generated HRD decentralized we also SOPHiA's first higher of method, producibility with presented centralized results Gynaecological robust solution set the the by that Congress. demonstrating the We weeks data shared a our on HRD Society Let's ago, in with of data validation CE-IVD decentralized technology highlighting

pick nearly complex clinical This confirmatory identify inhibitors. HRD to maintenance patients navigation samples Europe demonstrating ability high PARP our algorithmic is applied assay advanced and that for noise, to benefit demonstrate practitioners very biomarker in olaparib by performance as In setting. line the of cancer cancer from positive update the such are from XXX first-line in addition, metric. and treatment of trial even the with from PAOLA-X survival capabilities further in the to progression-free potentially on in the our clinical signal ovarian a HRD of a when results validation could provides validating much These guidance decentralized ovarian the clinical

mentioned earlier, ahead of see Jurgi us. runway As and a to with market pleased we our long very date traction HRD are

At market shared We addressable cancer, as in the such of Shifting of areas $XXX Beyond total SOPHiA, likeminded, synthetic other to a driven medicine be prostate breast ovarian HRD patient effort. work cancer, at alone. HRD's to practice to tumor be with as other cancer forward institutions We pancreatic see types, objective as other or million. well don't large. the in also relevant lethality advance mission-driven outcomes. cancer improve we data approximately with to view we next to for going potential partner

on working most be As strategic Memorial centers at to is States a announced Investor incredibly Day, in among we are which prestigious the the Kettering, collaboration and our across cancer United with excited Sloan world. the

on work testing. MSK-IMPACT Our assays for two world assays NGS one, liquid bring will other such to genomic comprehensive biopsy focus profiling potentially proprietary with technologies MSK their collaboration by and areas; initially as decentralizing to main similar the for

Second, deep highly and synergistic, leverage whereby generate together clinical see collaborate genomic sets. algorithmic We fuel on new in global the MSK's healthcare module. potentially infrastructure, with longitudinal and applications this oncology we to CarePath can and assays of data institutions technological insights as novel clinical partnership network our MSK's and SOPHiA with decentralized expertise database capabilities, on proprietary MSK

collective network to platform. with and class current Our is of expand world our intelligence to shared access SOPHiA the DDM our MSK including data, further expand vision to

we precision the their which our we in to the intend As believe Jurgi over end extensive developed relationship enables efforts data academic XX,XXX we intends leverage and excited about R&D mentioned, further our very SOPHiA database platform to patient this type also biopharma drive to of to markets. the medical partnership support is rich and already across biopharma similar by world. later combine are will replicate healthcare as innovation will are This opportunity MSK clinical expand innovation. we without spark help further other with on the oncology where penetration a our capabilities innovate type the collaboration wheel. we upon jointly further in organizations combined and continue of with partnering centers transformation this CarePath MSK's content the of space. leverage to to new it open with work intend of This reinventing the to In profiles the thrilled with in the to with module, academic the and context, leading clinical on and collaborations add leverage SOPHiA, from call. Overall, we applications centers

CarePath, of SOPHiA is DDM longitudinal highlight platform healthcare to like analysis on the is would which multimodal I a effort third The data. enables module SOPHiA that new the

more on performed earnings us heard core our its capabilities. calls this recently have speak demo You new I and at past of Investor about the where Day, module

immunotherapy around in SOPHiA this As through high SOPHiA module player across and CarePath cohorting This anticipate in leveraging that interest the oncology reminder, an initiative, new feel a life data aims the testing the ongoing it institutions a strategies. in context metastatic generate deployment select certification believe healthcare of international offers our single to helps prediction is eventually SOPHiA comprehensive to in great data beta biopharma excitement module in patient and SOPHiA the as the will individual place healthcare We lung Europe. patient in level sets advanced taking initial patient position cancer. a customers about response CarePath big of uniquely is of the and and insights non-small sciences We will at in community be as real-world capabilities DEEP-Lung-IV of U.S. our lens predict this in on CarePath space. visualization, journey. new context currently which cell it next-generation

platform. traction We are very around the continued with and the pleased enthusiasm strong

links as onboarding initiative, enrolled, have CarePath our this steadfast we well in expected SOPHiA announce before CarePath invest strategic which in XXXX. is environment, SOPHiA SOPHiA welcome you core We first In term. date, forward the clinical that key both that users on MSK precision over UMass We back, with Indeed, hands to market. happy U.S. you who Coming all we a to solution, to that opportunity one a our may such We here, top that reached the Memorial we SOPHiA U.S. for HRD now collaboration long as become CarePath, this CarePath patients will Clinic, effort. risk is look official pillars the which impact types it to the our the tier pass of progress commitment regulatory month, of we their QX as of adoption over the fantastic back journey. important at to updates increase of regulatory on launch context, see with module clinical highlights. more as X,XXX extending proud we in as cancer increased issued We scale. have efforts demonstrate to the have constantly lung the missing our with sites, are joined three as module, Mayo is feedback milestone continue space. to as which recently have it expanding and They The a a net in our into to medicine had remind To surface we note believe into collect see new stakeholders. this guidance updating you. in in continue see FDA users from in getting that on last been we front view Medical that, the bring And beyond one recently On positive offerings future. to highlighted new today just requirements, very in scratching recent biopharma its positive I technological rest focused the Center were the this the software concerning the other of note, examples near future. SOPHiA. and actively and our to Jurgi of great to the back decision contribute have the business we our are step to we cancer only been to Taking well such the quality higher in standards there menu we that response that this on once continuously Thank will believe want support

Jurgi Camblong

Thanks, Philippe.

a biopharma us. This opportunity sizable strategy. our I'm to Now dive advancing represents underpenetrated market into and going for

enhancing and believe customer is We within to share in business remains are still captured. excellent that this important significant our strides base be making market there

promoting offerings, development market. Chief our Starting the our growth framework we off Investor of to on believe in BioPharma biopharma continues our At introduced growing three menu Casasanto, Ds; focus and which offerings deployment, Day, positions uniquely Officer, us. data, be for our signifies of first Peter Our SOPHiA's with the terms data. to which D,

can can rich like the Our as randomized real-world to Layering controlled from customer setting. in real-world clinical customers sets MSK step biopharma take derive such multimodal multimodal to own routine a When a presents capture further a all and ability versus in algorithms data, proposition between the it to these trial AI our well begin technologies allows value as us and paired to understand our which proprietary a help insights meaningful trials or of in from likely which right empower to given to customers with even in unique of patients partners when own signals clinical and trial environment, our better as patient early respond data therapy. better we our clinical real provide coming data, relapse differences populations, biopharma's certain a to time stratify are data a design really base. the

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the accelerate commercial from with is might novel benefit are we of targeted the As This that HRD doing D, help can deploying on of what we exactly platform. therapy identification deployment, and patients solutions our globally solution. third our by drug proprietary

partnered access across currently institutions and expand world. with HRD AstraZeneca are laboratories testing to to throughout the We in-house

XX with a across biopharma algorithms. we continues Overall, the across that shared to and in of And as expanding XX vision promote so great. deployed is which our our beyond and of are am them three predictive decentralization far, clear been And in the has excited multimodal industry, key HRD importance conversations speaking fueling Ds them value have access. to say continues of institutions more scale to we stakeholders HRD with our that the is Ds. multimodal our continuously progress I with over in to countries, expanding improving it proposition data partnership AstraZeneca, and nicely a of are our of patient the three grow work the scope capacity with

on Chief to event We will medicine, the you as front such the how The the importance MSK, update with clinical multimodal two in tomorrow at Tenon advance The big is role our take Furthermore, the as we and leverage BioData as data AI will practice. of to precision pharmaceutical discussion from in Congress, an AstraZeneca, panel BioPharma healthcare. topics with will technology, development Paris; Congress discuss Officer Hopital months. in of Switzerland and best and combination covering well coming these as Casasanto, the this Europe's place exciting largest moderator. to topics representatives data integration which World in Peter in have more Philippe panel hosting are of

stay webinar the the we Following takeaways. Please host a with will main event, tuned.

investment way excited improving announce with of able partnership with advancement lead updates the creation, deepening competition next-generation to informatics that that in and healthcare driving scale deployment us also will to the back expected we the to sequencing partnerships. volumes multimodal other in of will globally. are ramp help and match Turning next-generation I'm expanding in Microsoft down strategic sequencing development to we improve healthcare are the Microsoft important. increasingly materially of to for standard Microsoft architecture help data longstanding with our workflows elevate up care CarePath and becoming so patients. through cost us

term, expanding are am the close with very happy mention to the operating proud with highlights challenges. the ongoing how SOPHiA would loss very out market is partnership and very the about I QX on OpEx to progress also market call for to responding like and work this continuing our near We I forward that moderating quarter section, them closely To I'm look the in evident to excited despite together. of

monitor I the will our a we're that, Ross shortly, through market continuing to his As operationally now and you Ross? remain with to focused actively conditions with call the to section get to as will discuss excel over Ross financials. company. in capital And hand

Ross Muken

$XX.X in the Swiss depreciation lira XX% growth basis negatively remarks the the through the which Thank you, despite revenue from $XX.X our to significant British third material due Jurgi. million FX dollar euro, across delivered approximately quarter. headwinds, approximately going I million financial my We period. U.S. will before turning continued steady by Turkish XXXX grew pound impacted by in points against results and begin in the franc, detail more to guidance. of X,XXX XXXX board to in results in year-over-year Total the

COVID-related biopharma up the remain very to growth revenue With exhibiting impressively by revenues, impact core as the currency to acceleration period. Jurgi was ramp in customer respect mentioned, trends approximately revenue the XX% strategic set. underlying from we continued Excluding sequential this quarter. growth, And the for constant very encouraged in

rate decreased dollar XXX% of net Our quarter in third the to XXXX. from XXX% QX retention in

quarter. at total we analysis is albeit XX,XXX would I it industry. by third driven The churn of revenue the the still slightly the software key rate, With to remains range currencies this respect the of exchange the within dollar. would what at number mentioned note decrease movement, revenue consider flat U.S. the in transactional standard foreign generated remained elevated within in the As primarily X%, earlier, platform was annualized in

in However, the grew XX% excluding approximately analysis platform period. COVID-related volumes,

somatic the solid Our tumors, our growth disease by portfolio, portfolio. we notably and oncology momentum the of million, of XXXX, in $X.X quarter Geographically, contributions strong of approximately in at to flat of XXXX, strong saw XXXX outperformed triple compared digit Adjusted relative from in XX% continued XXXX. $X.X gross strong rare prior third to and quarter highlighted gross margin from growth of HRD prior NORAM Turkey. the and over was compared inherited third prior remained quarter for to per year to while XX% due quarter an XX platform to margin EMEA was increased Average $XX,XXX year. challenges the period. approximately APAC, and Gross to underperformed the Gross third year profit revenue approximately increase for $XX,XXX million up points of in compared LATAM profit period. in customer XX% basis mainly in approximately balanced third the the

As previously Microsoft. with strategic also expanded mentioned, excited incredibly I'm partnership our about Jurgi

$X.X related of share-based as it yield and XXXX will lung operating in clients employee-related third The vision for million, increase well benefits and quarter including quarter expenses million Total the DEEP-Lung-IV primary am for a from million to also enabling increase moderate and a quarter to is third beyond. study in This expenses an primarily drivers quarter expenses for quarter sustainably of million compensation as year-over-year cloud, the expenses, our $XX.X XXXX. XXXX. operational R&D efforts. in professional will to in of costs. patients, the were XXXX and were conference-related our yield SOPHiA expenses, step-up cancer increase cell XXXX basis. non-small modest further to $X.X third grow third million XXXX the including on of share I the joint our travel in in for financial IFRS Sales million happy were and to the numerous third While marketing an the increase in were third to $XX.X the of quarter related those of $X.X $XX compared compared continued efficiencies

to per operating million equivalents million of XX, cash quarter of compared quarter $X.XX administrative at continue or exit in in on our primarily loss we scale Investor loss million confident was efficiently $XX.X driven to third the XXXX. recent quarter loss per us per of in believe constant share XXXX. of have quarter of modestly quarter focused to force million XXXX. respect we encouraged was was or of in expenses. growth XXXX. $X.XX third a loss in in as XXXX we the the investments remain compared million operating to loss million $XX.X employee-related As higher $X.XX $XXX.X an Cash quarter $XX.X expenses approximately of a XXXX. recent or am Adjusted operating September our loss XXXX at to Day, improvement and medium-term to our of highlight of in shared as the improvement with right in Operating of third $X.XX enable Net well operating to share quarter share-based currency our the the With achieve ex-COVID, $XX.X that net quarter as our and quarter compared million of for is a was third recorded the the for million million The continue growth million we XXXX. commercial were Despite was which of quarter-over-quarter Adjusted compared were $XX operating compensation $XX in increase third efforts this share third share expenses, per losses. loss $XX third continued third our $XX.X General to including and field is to to the $XX.X targeted remain third to I plan. moderating discipline, by the XXXX. second or in the the in we expense straight an quarter our our a as $XX.X compared increase quarter revenue in third the million of XXXX loss insurance-related

Turning to outlook. year our full

latest on to reaffirming view the transactional be Overall, now the XX% our foreign pound lira, $X up currency million, based range excess for as growth growth FX XXXX revenue revenue was than remarks. the Turkish $X guidance now $XX data-driven euro, I movements to future. to of towards we British full of And XXXX. in provided reported for and $XX.X franc, impact key QX between dollar closing we rates our by to estimate. foundations in for we million the the call the trends of Jurgi XX% of million XXXX on of are forecast, a the balancing and the exchange the full the year including the building We range expect total previously year my million. Swiss at currencies, contemplate section. bright our Of of provided with end over successful from U.S. our execute our to more turn quarter sustainable previously constant Based and another in low This now FX-related note, completes for the strategy, our the latest prior path will headwind back our profitability of continue the

Jurgi Camblong

takeaway business today's In closing of the call, Thanks, has great that our is important Ross. momentum.

world. stably We our pace expanding business are of current and growing across the

healthcare clearly in software, in DDM resonated unique this are platform SOPHiA at deeply of category the as industry which large. unmatched pioneered the with is we has market Our

the us you and the month. and your for the now at in back support Operator, happy later with on of SOPHiA and Philippe clinical entire the and collaborative achieve We that see to are the thank their us in in building, a focused trust allowed demand organizations without growing continue to take the for And family. again you results continue we where like Credit today. and SOPHiAns Technology call Ross, to our put on To our market, offerings please I that, the biopharma to couldn't for turn as over to forward look open for that selling I Conference line a have joining to in our remain who some end, both take to Suisse seeing to value us. offerings, be Arizona to delivering I the we innovating are we moment questions. the Thank today, effort would of We operator. and questions, will

Operator

we our from go question Ladies this at Savant Stanley. the from with comes and gentlemen, [Operator will And first question. Morgan ahead begin Instructions]. question-and-answer your Tejas Please time, session.

Unidentified Analyst

is Hi. This on Tejas. for Neil [ph]

look start, be the regulatory clinical burden clinical for software. support as how R&D as Any you the to that guidance context? spending in updated on CarePath enter mentioned to And FDA So cost trends market? should decision about we the to you implications thinking

Jurgi Camblong

question, Yes. Neil. Thank the for you

right, indeed, has CDS guidance when may new you device. to as medical a software with the it comes seen come So have and FDA

clinical impact plan right, for we the DEEP-Lung-IV two research which deployed the primarily in last context actually And in is so that deployed Massachusetts, and used tool, plan is remind I you the our have the effort the months today, in of basically being a onboarded used using there other the no CarePath, over now DEEP-Lung [indiscernible] effort. of that UMass, as our end one by and well centers, year are in being and as so sites are this have to in -- XX that

our type highlighted our So nothing a day of we in academic plans. we market of the our and centers in for general particular because that digital the beyond one the in bigger regulation change believe terms in in adoption us space in easier, we But hospitals. this results, of that community presentation as can welcome more make technologies in of bit

Ross Muken

already you made year-on-year a elements. our obviously we significant as the of capabilities And quarter, well of at that that a these this regulatory step-up shared number of we contemplated had budget, saw investments Day, obviously about R&D as in with least a side. the you on a And bit you the term a at mix of of engineering DEEP-Lung brought basis the was related Analyst we've in that some the and terms Ultimately, longer as plan costs. on think online

move so to at clinical least consider piece time market, respect at this the not I there investment CarePath. from material needs over shift we to related that we to And with in at may again a to need other obviously of would pure point, may there albeit our be as be financial any elements expect standpoint, to least legislation,

Unidentified Analyst

I helpful. very few then with multiyear quick That's a And questions partnership Understood. the had Microsoft. on

you benefit, to year-over-year should and So will we management the to other cloud data be about And margin still this vendors in the relates it frame agreement? services? your from how as cloud think 'XX contribution costs, operational utilizing for

Jurgi Camblong

Neil. Yes. Thank you,

partnership well some But enables think cost. our that's us to as you indeed, it important right, and extent that overall as understood improve understand. So to I beyond this cloud goes to

our runs right. Azure, in So platform

And so the more well. adoption of SOPHiA DDM, the better for Microsoft as

beyond mind really in terms So goes in this have costs. partnership of you what operating

we we in offering promote can in Azure centers. so are on together academic side of so that So we and the primarily Azure, working the jointly SOPHiA DDM have commercial the where plans

on to modernizing work our may And work we users it for and as on centers last, and using particular We able in language they and context anything to some the in research. capabilities natural gather comes the their we're with are Microsoft to in doing multimodal architecture well academic together present to processing in when as well space. have the data of of our to leveraging be Azure clinical scale CarePath when plans on them

some Ross, maybe to give you side? want well So the that, color beyond as expenses operational on

Ross Muken

Right.

Because there. of terms in are you costs, our the cloud a of cost frankly, pretty us well the operating buckets as the are and line. one happening so gives which R&D cloud, both largest COGS on leverage, overall, remember, as of good as of in So obviously compute number well and our there this efforts expenses our on are and

on importance of points. effectively, to of developments of perspective types market if cost both It like us eventually the be sequencing, a amount applications. in forward. of say bioinformatics the global like really And puts freedom the those be and some a or from importantly, data applications sequencing on new and to really think to to on path would biopsy in inflect will shift about and those where path as serve execution or most degrees some all a to so higher the production us the liquid space is the But panels you this able or CGP particularly and both going start us of as give of community even space of uptick going larger movement and I this more given and those the these continues to really of new emerging materially to shift whole happening the anticipated genome puts volumes

partner clinical using in In clouds, is terms Azure tremendous of Microsoft us. for multiple the leader, right, space. obviously, a is particularly a market

data think to are least the together use we use where of of next But as do you another there's the years countries and And may so Microsoft, us healthcare specific the can at help what it cloud. them over see we incredibly powerful. we always with or and number certain customer is an we need transform can finally vendor. into cases with the with partnership amount incredible There base

Unidentified Analyst

Got it. you. color. Thank helpful the Appreciate

Operator

[Operator Instructions].

comes Our Qin from Please question. ahead Julia your JPMorgan. next from question go with

Julia Qin

Hi. for questions. taking the Thanks

go biopharma the to How turning a in tumors you of of In HRD digit did little color. clinical this that in the clinical Jurgi, strength mix? could upside. the is share past, the trend said So you've highlighted solid if more part the terms triple I was I [ph]. versus business wondering bit you the quarter believe

Jurgi Camblong

give the so data Conference have I given and Philippe you well Thank European ESGO, then Gynaecological leave presented to we the will I start as question, some color for Oncology. Yes. at more will of Julia.

with over Northern U.S. learning a right. in capabilities the taking those and Day, a announced adopting in capabilities this centers us our developing so around HRD the as heard less deployed to having and have step algorithms we months including about XX you our of few XX right, back, about we've started these HRD than world, XX Investor it have beyond in technology And basically indeed, ago, our from capabilities took these platform well XX today as today deep countries, America it So the developing months

think I really, scale can strongly demonstrating solution around the world. that this So

HRD focusing space beyond capabilities. that benefit we along at of market make us today grow in on so presented a you the happening to and I we this testing what see ovarian ovarian beyond. now Philippe unique those how And cancer this confident so lines, are primarily And we going far, will doing data been in and potentially explain what's do cancer probably really our how but on could ESGO we've of leave

Philippe Menu

Thank you, you, and thank your for Jurgi, question. Julia,

think we if on the I take with of quality excited step we the remain and assay. the performance incredibly HRD, a back

method. call, decentralized technology And metric earlier of which also we very well. a mentioned concordance ESGO can fact Jurgi we the that very a presented is our that and couple performance the as know setting, much that reference in a in as complexity we our that were line weeks strong was ago that discussed solve we the Also can the clinical As at good showed data sustain survival in you very on footprint. through the also we then and progression-free showing with aspect validation

large, all of such growth market I three lot at date. ovarian opportunities a the looks going HRD. think I cancer; both and solution with segment think ovarian of lethality market. [ph] then share traction more we've market a the clinical on explored positioned pauses We're seen at with And pancreatic, biotech, and the capturing the we're cancer clear Having Lots pass pool because one, beyond with to pleased very really helps on also further decentralized biopharma low of others; looking support three, is tumors whole-genome. feel as So even interest, we solution all that the great. there. bigger be us to discovery-type number on very the and two, see and synthetic prostate well axes; and to We the incredibly position consequences forward, initiatives our in

you. it. Thank So that's

Jurgi Camblong

as we leverage clinical Philippe market, see beyond on the you biotech So prospects well and along ways technology of indeed customers. lines those with this Julia, the now different and, research and from as heard biopharma

Julia Qin

ramping I second have projects of you great. of the ASP, the this half then and Ambry the know in in terms Astra And That's the year.

that just your the with progressing ASP are the in FX line enough accretion whether if are ramps is offset guys to seeing? you curious expectations those headwind and So

Jurgi Camblong

Yes.

So we're traction. seeing great

is, with world Astra, the And standard as with in centers our we this of seen mainly for of XX higher the I and on deployment, again solution indeed, have Europe. than you're across HRD solution say, we the the fact right, well would right But ASP adoption great So work ASP. the countries. that HRD in

mean could would so this well increase over for -- And to ASP as I us our expect, as you be time.

Although in well see the on, sequencing in market, price. the know, example, contraction I right, you now would say for some as we as meantime,

obviously this create while will ASP will So the how market a don't know we for us, play. really bigger

happening important, with stabilize. So what's analytics is HRD, going go ASP today, up. data and expectation And the should in becoming that like more position with probably sequencing the eventually lower should our more our is of and costs that context volume

know, add our models, significantly So to some don't you I to in ASP we're not go predicting more want Ross, at if up. least color.

Ross Muken

Yes.

significant there's we're side, in -- right. which So seeing the We quarter then in FX headwind is There's elements. same-store I which ASP the right, general, price, the right, right, There's ASP first, let two sort would saw mix, is pretty and say here. obviously well, bigger step on me determinant back. good despite a a of

what's mix, robust So Pure that remains still low gets right. data much obviously, captured more mix of continues, shift ASP FX more and the ASP, reflected driving the single in digits, complex, higher price right. to priced, that's probably line. applications on higher The

much basis, down shift prices applications, to long-term price So you happening on probably given mix to and a but same-store it's I basis of come continue growth, sequencing with higher say, is a won't likely Jurgi's you would very to to really higher may where is a going to medium see expansion. markets, see the as slightly, what's costs, In certain right. the is priced function market going. on And volume accelerate actually point,

many above what solid or biopsy, our et those whole parts tumor where is liquid applications cetera, ASP CGP of or our So application about are if of today. you HRD genome, sizably that's portfolio, think average

the same-store the with overall see will play drive on shift NGS. overall of the And for so a how continues scheme depending mix on business, you of as things of reported a trend reimbursement story a the out favorably albeit growth maybe ASP less basis, positive those bit to

Julia Qin

Thanks. Great.

Jurgi Camblong

you. Thank

Operator

[Operator Instructions].

your with from Our go Kyle ahead next comes Cowen. Boucher Please question question. from

Kyle Boucher

It's taking the guys. morning, Good for Thanks Kyle Hi. on for questions. Dan.

into to thoughts do XX% now, think growth take about have if really growth at any are we you currency right 'XX stands constant juncture, it And growth that above this is on So 'XX? for level? as might And XX% this sustainable factors FX the revenue what 'XX? the

Ross Muken

similar at in positive So in medium-term Day, in range also third the the benefited to including XX%, in momentum the XX% us, though general, say, number side. to year. I yet right, our our Obviously, that business we've the guide we talked provide our other of a would what have in to factors Analyst not and position about of good, pharma obviously, momentum But you on we being did we're for is see the business the right. at quite quarter a Obviously, we've growth to XXXX. look seen revenue this

we being it'd at over of the end So Obviously, of range range the years be term lower the where certainly that what think above upper that and or some be you longer at end. should there'll years some see period.

to that's we in is pharma to just good. the And quite the no October, so mindful very the that noted ultimately, and being utilization and or land. obviously, of And terms change ramp, macro's strong we're quite called business on trajectory. ASPs, being see on that's overall, expecting But investments. right. script a so And doing shift the modeling impact also also We out you on we're where positive mix can in good the starting

quite backlog, line spoken And good us pretty I've obviously, to as also we've our So for top of in past, a momentum. revenue. continuing a us gives existing in right, lot picture the terms next got buttressing on forward year

visibility And overall I year, next quite our into would is say, good. so

on Now quite movements move you. seeing 'XX headwind that in to again, update at probably next where as be a would there's different we But I unprecedented can moment. FX of the X/XX. around could based the say we're are market with when slight the just currencies

we're in going And able place so it unfortunately. environment to nail not where the that's be current down one to

Kyle Boucher

maybe exact America by slowed we provide region you is traction? map, comp forward? growth about in in on there then, X% there. And of any And just range could and don't But XQ be we North Got so the the growth an it. maybe America, to expecting North update should I have in our that moving think

Jurgi Camblong

Thank you, Kyle.

actually America, very last as spending North time in And traction myself some at here, it's and good. lately week the I've doing in quite the AMP well as been I very, well conference So Phoenix. was visits customer

see. we with what encouraged very we're So

leverage collectively with the will world. So some just better a have right, and that other serve we an to to partnership centers create data back, MSK intelligent of announced to U.S. this system the taking us on around step enable in academic the great

the data economical great and rather being the SOPHiA traction and than the as well Mayo reinventing context, are And of more as side We DEEP-Lung-IV which they importance on study. have sound that well comes as especially that as such the announced you the of seeing right. importance And been we're the to macro scientists traction Clinic tools, platform industrialized when constraints suboptimal, great are labs, wheel, their and leveraging efficiency. with it when operational of investing one in now on the we've of well, overall centralized with having current part with consider fact the

in continue line we the really shared to So America North what past. Northern of see with we and encouraged should we what to grow in America, expect indeed along had the

Kyle Boucher

it. you. Got Thank

Operator

Instructions]. [Operator

question. from Massaro Mark Please from with go comes question your next BTIG. Our ahead

Vidyun Bais

questions. guys. for for on Mark. taking Hi, Vidyun is This Thanks the

how So regulatory increase is I of evolving is your at know maybe Analyst Day a sourced the mentioned competitive using level, landscape at data you could high a directly the requirements? discuss a in differentiator. result as you that key

curious you Thanks. per competitive into of terms price just any if run analysis? in So dynamics

Jurgi Camblong

you Vidyun, morning, thank and Good your Yes. question. for

we see right. trends, definitively, positive So lot a of

fact lower, being fact would which sequencing many companies landscape, say, in that cost are right. clinical I the one competitive the that more and market you the the, is rolling target out now have the to So sequencers going

volumes need expect in market. to compute and genomics. their in as that, growing with the definitively academic we central labs expect to centers clinical will we So volumes that partner go up industrialized And well

think is with refer I what right, well terms have been data. as to you you doing what this we and of probably to, MSK refer genomics, Beyond in

when that to So serve we is indeed comes serve our we it to can research understand other there the to so clients across pull data better that that centers centers. for other well as data this and pull intelligence purposes, the indirectly sure some in basically been more that has on and decision-making, academic more but globe eagerness somewhere patients gathered from this making leveraging knowledge

Vidyun Bais

remind Perfect. us a Okay. where prioritizing, Thank you. out quick Could just Analyst revenue you Maybe about your of talked your of the just on long-term housekeeping also Day. runway targets I headcount question. you business know stands? areas you're comment cash and

have just profitability Thanks. to any you expanded Microsoft path thoughts a the given So on partnership?

Jurgi Camblong

Sure.

to to Day plans speaking on been and the path you Maybe comes when we've said? we Investor So want our runway. Ross, indeed it reiterate profitability about cash to what

Ross Muken

Yes.

operating sequential of in adjusted decline we're row obviously despite growth, organic accelerating second topic, the show on quarter to, So a in happy loss. a

So on I very toward focused deliver our obviously highlighted on our well we're as balancing commitments, which ability top before moving to as line profitability.

around that I Day the think metric discussion incremental at really right. margins, to this with most important is respect Analyst the I provided

we us capitalization on think I aggressive in most on also the and drop side ties back businesses. highlighted being you And not particularly software of that revenue look can versus of at so what down terms the there some future to

new converts down buy will And profit down loss be comes and quite the overall ultimately over that it revenue so as that drop in, to will as significant time.

if pretty will get sense can crossover when of map a that, think And so of we sort you again, occur. it good out, you that

again spend. aimed lot on a on XXX. projects making also, got discretionary the pushing on, and spend. the side, would cost and we're of type on work And forward. and around ROIC controlling say what we're about base our highest is of headcount sure the making the very efficiency being On that we're I ensuring we're focused we've doing roughly of R&D remains sure predominance working A flattish we're with lot side side, a our Headcount talked labor we've the at that our

respect that's R&D et doing whether the partner programs, also Additionally, through through to for with on or and side channels, that's us what we're getting selling right, different whether leverage, helps cetera. sponsorship investments

to discussed our I deliver -- we I so of sort at focused and and again, say very on feel would theme that growing of Day. the what ability Analyst quite in And we're sustainably, confident

Vidyun Bais

for much so Thanks taking the Great. questions.

Jurgi Camblong

Vidyun. you, Thank

Operator

that session. with management we'll back gentlemen, today's and to for be floor the turn closing over concluding question-and-answer Ladies I'd to any remarks. like

Jurgi Camblong

all. you Thank Yes.

and we're partnerships So it with next the being for will Have we much Conference the very future see forward contracts today, that Credit be And and was additional pleasure of Arizona one great looking a months. very month, in be be as will the we you update in to the will the you disclosing of Suisse forward at end you in the there. at good to day. looking much

Operator

call gentlemen, for Ladies we'll with and that and thank joining. We today's presentation. you conference conclude

You may disconnect your now lines.

SOPHiA GENETICS (SOPH) 12 Nov 222022 Q3 Earnings call transcript