BOSTON and LAUSANNE, Switzerland, Sept 9, 2021 — SOPHiA GENETICS SA (NASDAQ: SOPH), today reported financial results for the three months ended June 30, 2021.
- Revenue was $10.2 million for the second quarter, representing a 72% increase over the corresponding period of 2020
- Increased total customer base of hospitals, labs, and biopharma institutions to 780 customers during the second quarter, up from 750 in the first quarter of 2021
- Strengthened balance sheet by raising approximately $217 million in net proceeds from the initial public offering in July 2021 and an additional $20 million in gross proceeds from a private placement investment from an affiliate of GE Healthcare
- Expanded partnership with DASA, the largest integrated healthcare network in Brazil, to offer the first decentralized homologous recombination deficiency (HRD) solution in Latin America
- Announced a co-marketing agreement with Agilent to offer an end-to-end solution that automates next generation sequencing (NGS) library preparation and analytics processes for cancer research
“We had solid execution across our business during the second quarter, growing top line revenue more than 70% over the prior year period,” said Jurgi Camblong, Co-Founder and CEO of SOPHiA GENETICS. “I am encouraged by our growing customer base as well as the increasing enthusiasm around for the impacts data driven medicine can have on patient outcomes. Overall, I am so proud of what we have achieved at SOPHiA and even more excited for what lies ahead. We are committed to unlocking data siloes, leveraging AI to generate actionable insights from data, and helping healthcare professionals work together as a community and deploy their collective expertise for the benefit of patients around the world.”
Second Quarter 2021 Financial Results
Total revenue for the second quarter of 2021 was $10.2 million compared to $5.9 million for the second quarter of 2020, representing a 72% increase. This increase was primarily driven by new customers onboarded onto the platform and improved usage rates across existing customers as COVID-19 related restrictions loosened.
Gross profit in the second quarter of 2021 was $6.2 million, an increase of 57% compared to a gross profit of $4.0 million in the second quarter of 2020. Gross profit margin was 61% in the second quarter of 2021 as compared to 67% in the second quarter of 2020. The decline in gross margin was primarily attributable to increased computational and storage-related costs and negative FX movement. Adjusted gross profit was $6.3 million, and adjusted gross margin was 62% in the second quarter of 2021 after adjusting for the amortization of capitalized research and development expenses, which is expected to grow over time as SOPHiA expands its research and development efforts.
Total operating expenses for the second quarter of 2021 were $22.2 million compared to $11.0 million dollars in the second quarter of 2020. This increase in operating expenses was primarily attributable to increases in employee-related expenses for R&D initiatives related to the development of new products, increased sales momentum as COVID-19 restrictions loosened, and continued scale-up of the Company. Other contributing factors include increased commissions and sales-related costs, development of quality-related initiatives to support a potential expansion into more regulated markets, and IPO-related expenses.
Operating loss in the second quarter of 2021 was $15.9 million, compared to $7.0 million in the second quarter of 2020. Adjusted operating loss in the second quarter of 2021 was $14.3 million, compared to $6.4 million in the second quarter of 2020.
Net loss in the second quarter of 2021 was $18.4 million, compared to $7.9 million in the second quarter of 2020. Net loss per share was $0.38 in the second quarter of 2021, as compared to $0.20 in the second quarter of 2020. Adjusted net loss in the second quarter of 2021 was 15.0 million compared to $7.0 million in the second quarter of 2020. Adjusted net loss per share was $0.31 in the second quarter of 2021, as compared to $0.18 in the second quarter of 2020.
Cash and cash equivalents, including term deposits, were approximately $64 million as of June 30, 2021. After quarter end, the Company priced its IPO and began trading on July 23, 2021, raising approximately $243 million of gross proceeds, yielding approximately $217 million in net proceeds. Concurrent with the IPO, the Company raised an additional $20 million in gross proceeds upon the completion of a private placement investment from an affiliate of GE Healthcare.
SOPHiA Genetics expects full year revenue for 2021 to be greater than $39 million, representing growth of over 37% compared to the prior year period.
Webcast and Conference Call Information
SOPHiA GENETICS will host a conference call to discuss the second quarter 2021 financial results, business developments and outlook before market open on Thursday, September 9, 2021 at 8:30 AM Eastern Time / 5:30 AM Pacific Time. Live audio of the webcast will be available on the “Investors” section of the Company website at: ir.sophiagenetics.com.
About SOPHiA GENETICS
SOPHiA GENETICS is a healthcare technology company dedicated to establishing the practice of data-driven medicine as the standard of care and for life sciences research. It is the creator of the SOPHiA DDM™ Platform, a cloud-based SaaS platform capable of analyzing data and generating insights from complex multimodal data sets and different diagnostic modalities. The SOPHiA DDM™ Platform and related solutions, products and services are currently used by more than 780 hospital, laboratory, and biopharma institutions globally.
Non-IFRS Financial Measures
To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this earnings release the following non-IFRS measures:
- Adjusted cost of revenue, which we calculate as cost of revenue adjusted to exclude amortization of capitalized research and development expenses;
- Adjusted gross profit, which we calculate as revenue minus adjusted cost of revenue;
- Adjusted gross profit margin, which we calculated as adjusted gross profit as a percentage of revenue;
- Adjusted operating loss, which we calculate as operating loss adjusted to exclude those adjustments made to calculate adjusted cost of revenue, amortization of intangible assets, share-based compensation expense, non-cash portion of pensions expense paid in excess of actual contributions to match the actuarial expense, and non-recurring expenses related to the IPO that were not capitalized;
- Adjusted finance income (expense), net, which we calculate as finance income (expense), net adjusted to exclude changes in the fair valuation of the derivative tied to the success fee we are obligated to pay to TriplePoint Capital LLC upon completion of our initial public offering;
- Adjusted loss for the period, which we calculate as loss for the period adjusted to exclude those adjustments made to calculate adjusted cost of revenue, adjusted operating loss and adjusted finance income (expense); and
- Adjusted loss per share, which we calculate as adjusted net loss divided by the weighted-average number of shares.
These non-IFRS measures are key measures used by our management and board of directors to evaluate our operating performance and generate future operating plans. The exclusion of certain expenses facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain variable charges. Accordingly, we believe that these non-IFRS measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
These non-IFRS measures have limitations as financial measures, and you should not consider them in isolation or as a substitute for analysis of our results as reported under IFRS. Some of these limitations are:
- These non-IFRS measures exclude the impact of amortization of capitalized research and development expenses and intangible assets. Although amortization is a non-cash charge, the assets being amortized may need to be replaced in the future and these non-IFRS measures do not reflect capital expenditure requirements for such replacements or for new capital expenditures;
- These non-IFRS measures exclude the impact of share-based compensation expenses. Share-based compensation has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy;
- These non-IFRS measures exclude the impact of the non-cash portion of pensions paid in excess of actual contributions to match actuarial expenses. Pension expenses have been, and will continue to be for the foreseeable future, a recurring expense in our business;
- These non-IFRS measures exclude the impact of non-recurring expenses related to our IPO, which are cash expenditures, and we expect to incur financing expenses from time to time;
- These non-IFRS measures exclude the impact of changes in fair value of the derivative associated with the fee payable to TriplePoint Capital LLC, which we must repay in cash upon completion of our IPO; and
- Other companies, including companies in our industry, may calculate these non-IFRS measures differently, which reduces their usefulness as comparative measures.
Because of these limitations, you should consider these non-IFRS measures alongside other financial performance measures, including various cash flow metrics, net income and our other IFRS results.
The tables below provide the reconciliation of the most comparable IFRS measures to the non-IFRS measures for the periods presented.
This press release contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy, products and technology, as well as plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including those described in our filings with the U.S. Securities and Exchange Commission. No assurance can be given that such future results will be achieved. Such forward-looking statements contained in this document speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements.