SOPHiA GENETICS SA

Good day and welcome to the Sophia Genetics Second Fiscal Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jennifer Pottage, Head of Investor Relations. Please go ahead.

Welcome to Sophia Genetics' second fiscal 2022 earnings conference call. My name is Jennifer Pottage, and I'm the Head of Investor Relations at Sophia Genetics. Joining me today are Dr. Yurgi Kamblong, our Co-Founder and Chief Executive Officer, and Ross Muecken, our Chief Financial Officer. Before we get started, I would like to remind you that management will make statements during this call that are forward-looking within the scope of U.S. federal securities laws. These statements are based on management's current views and assumptions, which are subject to material risks and uncertainties that could cause actual results or events to differ materially from those projected. Additional information regarding these risks and uncertainties are included in a section entitled cautionary statement regarding forward-looking statements in Exhibit 99.2 of the report on Form 6-K filed today with the SEC. Except as required by law, SOFIA Genetics disclaims any intention or obligation to update or revise any forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of its broadcast, August 9, 2022. Please note that the replay of this call as well as the earnings release and associated slides will be available on our website in the investor section. And now, I'll turn the call over to Yergi.

Thank you, Jen, and hello, everyone. I'm pleased to be here with you today to share the progress of yet another solid SOFIA quarter with healthy demand across our core platform offerings and key geographies, as well as steady momentum in our major initiatives underlying our strategic pillars. Despite the challenging macroeconomic environment, our success as a company continues to be driven by the forward-thinking healthcare institutions and life science leaders that are consistently choosing Sophia as their trusted cloud-native analytics platform. But before diving in, I would like to take this moment to thank all the dedicated Sophians whose efforts fuel our success each and every day. I'm proud to lead this talented team in our ambitious journey to democratize data-driven medicine and build a global network of collective intelligence for healthcare. On today's call, the narrative for the second quarter will revolve around an overarching theme, sustainability. Our core focus today will be on sustainability and highlighting some of the investments and actions we have already made that will keep SOFIA on its path of consistent and attractive long-term growth, as well as placing us on a clear path toward profitability and cash flow generation. We have been primarily focused on building our core capabilities and infrastructure to drive outside growth momentum and realize our sizable, total addressable market. Now that we believe we have created a solid foundation to build upon, our plan is to transition into a more sustainable investment model as we have always intended. I am happy to share that many of the crucial capital investments needed to scale our business and support our growth plan over the medium term are being well underway. Given this dynamic, we would expect operating leverage to become increasingly apparent in the upcoming period and allow for an extended cash runaway through 2025 and beyond. I am so proud of the many achievements we have made over the past years. we built a broad network of customers globally through a strong product portfolio. We computed a tremendous amount of data, which can be leveraged by both our clinical and biopharma customers to create meaningful insights. And on top of that, we're also preparing for the deployment of CURPAS this year, a new model of our platform that will bring to life our aspirations of providing multimodal longitudinal data to our core customers to support their diagnostic and treatment decisions. The seeds of our long-term success have already been planted, and now is the time for us to begin harvesting the fruits of these efforts. Now, let's get into the Q2 highlights. Starting off with new customer adoption and the expansion of the SOFIA network. We are hyper-focused on building long-lasting relationships with new customers to increase and diversify the platform's network. Customer growth on a global scale proved to be resilient this quarter despite macroeconomic and geopolitical challenges, which have primarily impacted us on a reported basis due to the unfavorable FX headwinds generated. While global growth is a priority altogether, we remain concentrated on North America, our largest potential market, where we continue to advance our strategy and see positive developments. To that end, On top of continuing to penetrate leading academic centers, we're also making solid progress with penetrating the centralized lab space in North America. We look forward to sharing more details on our momentum very soon with respect to these efforts. Consumption trends across the board were steady in Q2. Sophia's sales strategy revolves around ensuring that new and existing customers recognize a full range of use cases of our platform to broaden and deepen customer relationships. You may have heard us talk about Sophia's traditional land and expand model on previous earnings calls. Both application consumption continues to be key to deriving mutual benefits between us and our customers. expanding key customer wings into transformative long-term business relationships. Total recurring platform customers grew to 388 in the second quarter of this year, up from 367 customers in the second quarter of 2021. The total number of platform analyses increased to approximately 66,000 in the second quarter, up from approximately 63,000 analyses in the second quarter of 2021. Year over year, our core platform analysis volume, excluding COVID-related analyses, grew approximately 17%, while total analysis volume grew approximately 5%. Overall, global usage has generally tracked according to expectations. with the exception of Turkey, where we saw a notable decline in the period due to the impact of the LIBRA's continued depreciation and its implication for reimbursement rates. In another Q2 highlight, we recently finalized an additional agreement with GLCARE to further integrate data between GE's Edison platform and the Sofia DDM platform. We are thrilled to be taking this step with them to deepen our partnership and enable our shared customer base to interpret complex data and generate novel insights. Additionally, this past June at ASCO, Sophia and GLScare presented together in a joint symposium about the respective efforts to unlock the promise of data-driven medicine in cancer through the use of multimodal data. Our chief medical officer, Dr. Philippe Meunier, presented the preliminary findings for DIPLUNG4, the observational clinical study that we launched to validate predictive signatures of response to immunotherapy for patients with advanced non-small cell lung cancer. At ASCO, we were relieved that we showed an initial 80% predictive value for such responses, which is incredibly exciting. ASCO itself was a big success for us as it resulted in numerous meaningful conversations with customers. especially the biopharma community, who recognize the value not only in the rich volume of data we have computed on our platform, but also for the value of our algorithms, which can help improve the insights and quality of their own data. Additionally, with respect to Diplunk4, the insights generated from the study are also expected to accelerate the development and enhance the capabilities of ClearPath. which is still on track to be deployed later this year. CURPAS will offer advanced data visualization, courting, and ultimately predictive capabilities through a single comprehensive lens throughout the patient journey. We anticipate that this module will complement our biopharma business by helping LifeSense customers select the right patients for the clinical trials and offer them robust patient analytics as well as insights throughout the course of their trial. We are encouraged by recent discussions and it is clear that our value proposition to biopharma companies continues to grow with the expanding scale of our multimodal data and platform capabilities and continuously improving predictive algorithms. Overall, Q2 was a successful quarter as we continue to execute on our core business while building the foundation for our future. We're optimistic for the second half of the year, and our focus remains on our long-term growth and accelerating our strength to sustainably build the Sophia of tomorrow. And with that, I will now hand the call over to Ross to take you through our financial and operating results in more detail.