SOPHiA GENETICS S.A. (SOPH) Earnings

Management highlights

### Strategic Direction & Growth Pillars - The company has completed Phase 1 (building out the genomic AI platform and global customer network) and has entered Phase 2: leveraging the network and data to expand biopharma partnerships, build real-world evidence assets, and advance clinical intelligence tools. - Four core growth pillars: 1) Scale genomic diagnostics globally via new customers and existing account expansion; 2) Evolve genomic applications into regulated companion diagnostics (CDX) and software-as-a-medical-device; 3) Build a multimodal real-world evidence data layer from network data that is a strategic asset for biopharma; 4) Develop advanced clinical intelligence tools including digital twins. ### Q2 2026 Operational Achievements - Total patient analysis volume hit a record 115,000, up 22% YoY; 24 new customers were added in the quarter, with total core genomic customers reaching 542 as of June 30 2026, up from 490 YoY. - Net dollar retention reached 117%, up 1000 basis points from 107% YoY, and annualized revenue churn remains below 1%, demonstrating strong platform stickiness. - New key wins include a partnership with Children's Hospital of Philadelphia to develop a pediatric cancer liquid biopsy test, and 80 total liquid biopsy customers signed globally, with over half yet to generate revenue creating future growth runway. - Announced two new multi-year companion diagnostic programs with AstraZeneca, the first CDX wins in company history, which will accelerate future revenue and enable additional data collection for real-world evidence assets. - Signed a memorandum of understanding to form a joint venture with Memorial Sloan Kettering (MSK) to build an AI Lab of the Future in New York City, combining MSK's clinical expertise and data assets with Sophia's AI platform to develop new precision oncology tools. ### Financial Operational Highlights - Adjusted EBITDA loss improved 27% YoY to $8.8 million, with over 60% of incremental revenue dropped to the bottom line while adjusted operating expenses remained flat YoY, demonstrating strong operating leverage. - The company closed an oversubscribed public offering in June 2026 that raised $57.5 million in gross proceeds, bringing total cash and cash equivalents to $107.7 million at the end of Q2. - The U.S. market has hit a demand inflection as reimbursement rates stabilize and denial rates improve, with more hospitals and labs bringing genomic testing in-house, creating strong sustained growth momentum.

Guidance

- Full-year 2026 revenue guidance was raised from the prior range of $92 million to $94 million to a new range of $94 million to $96 million, representing 22% to 24% full-year YoY revenue growth. The new lower end of the guidance range is above the prior upper end, reflecting confidence in continued first-half momentum. - The company reaffirms its prior guidance of an adjusted EBITDA loss of $29 million to $32 million for full-year 2026, and maintains its expectation to approach adjusted EBITDA breakeven by the end of 2026, and reach positive adjusted EBITDA in the second half of 2027. - The two new AstraZeneca CDX programs are multi-year agreements with tiered milestones, and will only make a modest revenue contribution in the second half of 2026, with most revenue impact expected in 2027, 2028, and beyond. - Management maintains long-term guidance that gross margins will gradually improve over time, after a temporary Q2 2026 decline driven by early-stage pharma projects and new cloud infrastructure setup.

Segment performance

Total Q2 2026 revenue was $23.3 million, representing 27% year-over-year growth. By application segment: Hematological oncology (hemonc) volumes grew 34% YoY, rare disease volumes grew 35% YoY, solid tumor testing grew slightly above the company average, and liquid biopsy delivered 80% YoY revenue growth. The biopharma segment contributed nicely to overall growth as existing signed projects continued to deliver, and is now a growth accelerator for the business. By geographic segment: The U.S. market led growth with 64% YoY revenue growth and 60% YoY volume growth. Asia-Pacific delivered 27% YoY volume growth and 31% YoY revenue growth. EMEA volume growth was roughly in line with the company average. Latin America has recent new wins that will come online in future quarters. Core genomic diagnostics accounts for the majority of revenue, with biopharma contributing a growing smaller share.

Risks & headwinds

- Garden Health has ongoing patent infringement claims against the company in the UK, with the Unified Patent Court of Appeals already rejecting Garden's appeal and upholding the company's right to commercialize the MSK access test without restriction; the UK proceedings remain ongoing, and the company incurred $1.1 million in net legal expenses related to the litigation in Q2 2026. - Gross margins have been temporarily depressed in Q2 by lower-margin early-stage pharma projects, customer implementation services, and new regional cloud infrastructure fixed costs. - The company maintains a healthy implementation backlog driven by strong new bookings, but balancing backlog conversion with controlled headcount growth to preserve profitability creates a minor operational constraint. - Forward-looking statements around future growth and profitability are subject to material risks and uncertainties that could cause actual results to differ materially from expectations, including timing of new customer launches and contract milestone achievement.

Analyst Q&A

• Q: U.S. revenue growth of 64% YoY is very strong — what customer and product segments are driving this growth, and how is cross-selling trending? /

  A: Growth is broad-based, with the strongest demand in two product lines: enhanced exome testing (which supports rare disease, hereditary cancer, pharmacogenomics, and carrier screening) and hematological oncology testing, with growing demand in MRD, CLL, and AML. Early demand growth is also emerging for in-house liquid biopsy and comprehensive genomic profiling solid tumor testing. The company has intentionally focused more on expanding within existing customers than adding high volumes of new small accounts, with current average adoption of just 2.5 applications per customer out of more than 10 available, creating large room for upsell growth. Cross-selling is trending positively, with customers adding applications across disease areas, supporting high net dollar retention and low incremental cost growth.

• Q: With over $100 million in cash after the recent offering, are you planning to meaningfully increase headcount for U.S. and global growth? /

  A: The company has kept overall full-time headcount relatively flat by leveraging AI tools to improve organizational productivity, a strategy that will continue. Select targeted headcount additions are being made only to the U.S. commercial team to capitalize on strong current growth, with small additional investments in high-potential markets including Japan, the UK, Belgium, Austria, and Germany, and for the growing biopharma partnership segment. All investments are targeted to deliver high returns and support continued accelerated revenue growth without uncontrolled operating expense increases.

• Q: Can you share more details on the MSK AI Lab of the Future joint venture, including the expected 2026 financial impact? /

  A: The joint venture will serve as an R&D center for developing new AI-powered precision oncology products and clinical intelligence tools that meet growing demand from hospitals and biopharma customers. The definitive agreement is still being finalized, so no specific financial details for 2026 are available yet. The JV is a strategic initiative that reflects the strength of the existing MSK partnership and positions the company to capitalize on ongoing transformation of the U.S. diagnostics market.

• Q: What explains the Q2 decline in adjusted gross margin, and will this reverse in the second half to hit your full-year expansion target? /

  A: The temporary decline is driven by three factors: early-stage pharma projects have higher upfront costs and lower initial margins, new regional cloud infrastructure build-out for expansion into new geographies carries fixed start-up costs, and higher volume of new customer implementation services (which carry lower margins than core analysis revenue). Management expects margins will balance out in the second half of 2026, and reaffirms the long-term expectation of gradual gross margin expansion over time.

• Q: What is driving the guidance raise, and what is the balance of risks for second half performance? /

  A: The guidance raise reflects stronger than expected first half performance and continued momentum across the business, with the new lower end of the range above the prior upper end, showing high confidence in continued trends. The new guidance is intentionally conservative, in line with the company's historical pattern of meeting or beating guidance. Upside potential exists if new large customers and contracts start generating revenue sooner than currently expected. Most revenue from the new AstraZeneca CDX deals will come in 2027 and 2028, so they will only have a modest impact on 2026 results.