SOPHiA GENETICS SA

Good morning, everyone, and welcome to the Sophia Genetics third 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 and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Jennifer Potich, Head of Investor Relations. Ma'am, please go ahead.

Good morning, and thank you for joining us on the SOFIA Genetics Q3 Fiscal 2022 Earnings Call. My name is Jennifer Potich, and I'm the Head of Investor Relations at SOFIA. Joining me today are Dr. Yergi Camblong, our co-founder and chief executive officer, Dr. Philippe Meunier, our chief medical officer, and Ross Muecken, our chief financial officer. Before we get started, I would like to remind you that management will be making 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 the 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, November 8, 2022. Please note, both the replay of this call and a copy of the earnings release will be available on our website in the investor relations section. And now, I'll turn the call over to Yergi. Yergi?

Thank you, Jen, and hello, everyone. We appreciate you joining us on our call this morning. I'm pleased to share that our results for the third quarter remain strong, with accelerating organic growth and improved operating leverage, demonstrating our commitment to sustainable growth, despite the negative impact from foreign exchange rates on our reported results. Total revenue for the period grew 40% year-over-year on a constant currency basis, excluding impact from COVID-related revenue. This shows that even in an environment as challenging as the one we operate in today, Sophia is still proving to be the preferred cloud-native analytics platform, trusted by forward-thinking healthcare institutions around the globe. The combination of our differentiated technology, robust commercial traction, improving operational discipline, and a world-class global team continues to drive steady, growth and demonstrates that we are well positioned to thrive under the economic scenarios that may lay ahead. We firmly believe we are in a great spot to grow as a leader in securing and supporting the precision medicine software market. I will start off today's call by reviewing our progress of the quarter as it relates to new customer adoption and platform consumption trends. Next, you will hear from our Chief Medical Officer, Dr. Philippe Meunier, who will discuss updates regarding our money expansion strategy. After which, I will finish off the Q3 Business Highlights by discussing our increased traction in the biopharma market and updates with some of our strategic partnerships. And finally, Ross Muckan, our Chief Financial Officer, will go through our financial results and full year outlook in more detail. But before I go on, I would like to thank those of you who joined us in person and virtually At our first investor day, we hosted a little over a month ago in New York. It was a fantastic event, and it was so great to see so many of you there. I would highly encourage those of you who couldn't make it to watch the replay posted on our investor relation site, as it is a good resource to better understand who we are, how we sell, how we innovate, and how we grow sustainably. Now, let's get back to the Q3 highlights. Starting off with a new customer adoption. As a high-level overview of the reporting period and with one more quarter to go in 2022, momentum in our business continues to be robust on a global basis. Much like last quarter, customer growth proves to be resilient. We're spending our time focused on advancing Sofia's growth strategy by building long-lasting relationships with customers to further increase and diversify the platform's network. To that end, we added 17 new logos in Q3. Steady momentum of onboarding new customers demonstrates our consistent execution and the universal nature of our competing offering. A fact which was very much validated during my recent travels with our sales team, spending important face-to-face time with our customers. It bears reiterating that while global growth is a priority, we remain highly focused on accelerating our penetration of North America. This region represents our largest potential clinical market at an estimated $8 billion, where we continue to see positive developments. I am pleased with our progress of materially inflecting sales activity with respect to new clinical customers in this region. The growing demand remains balanced between academic medical centers and large centralized labs. Beyond North America and Europe, I am also pleased to highlight the momentum we experience in Asia-Pacific, and Latin America, which validates our vision of advancing the practice of data-driven medicine globally. Among the new deals won in the third quarter, several of them are important to highlight as they are the first clinical institutions in their respective countries to adopt SOFIA's HRD solution, which is incredibly exciting. These deals include Unipass and MedGenome, which are two of the largest clinical labs in India, the Prince of Wales Hospital, one of Hong Kong's premier institutions, and also the National Institute of Genomic Medicine, a leading research laboratory in Mexico. We are thrilled to get our foot in the door with each of these countries through their initial utilization of SOFIA's HRD solution. Later on the call, you will also hear from Philippe, who will talk about a significant milestone with new clinical results we presented two weeks ago at the annual conference of the European Society of Gynecological Oncology that validates the power of Sophia's HRD solution. We're highly encouraged by this result and view it as another compelling proof point that will help further adoption of our platform. Broadening and deepening our existing customer relationship is crucial to our growth strategy as we employ a land and expand sales model, typically of many software companies. Our approach has always been about ensuring that new and existing customers recognize the full range of applications that the Sophia DDM platform can provide. As customers continue to benefit from the value of Sophia DDM, their utilization increases. Total recurring platform customers grew to 383 in the third quarter of this year, up from 375 customers in the third quarter of 2021. The total number of platform analysis was approximately 62,000 in the third quarter, representing flat growth compared to the prior year period. This result stems from growth in our core platform analysis volume being offset by continuous slowdown of COVID-19 related analysis volume. However, excluding COVID-related volumes, platform analysis grew approximately 11% in the period. Our oncology portfolio performed well during the third quarter, and its strength was driven by triple-digit growth in HRD analysis volume and continued momentum in solid tumors. Geographically, we saw balanced growth from low RAM and notably strong contribution from LATAM and APAC, while EMEA underperformed mainly due to continued challenges in Turkey. Furthermore, I am happy to report Platform Analysis Volume has started the first quarter on a very strong note and underline our business model's resilience in a challenging macroeconomic environment. In conjunction with landing new customers and expanding their cross-application utilization, we remain competitive by also focusing on expanding and enhancing our menu of offerings, which Philippe will take you through in more detail now. Philippe?