Breaking Down SOPHiA GENETICS SA (SOPH) Financial Health: Key Insights for Investors

You're looking at SOPHiA GENETICS SA (SOPH) and wondering if the growth story justifies the burn rate, which is defintely the right question to ask for any high-growth biotech platform.

The direct takeaway from their Q3 2025 report is a clear acceleration in top-line performance, but still a significant cash outlay as they scale their AI-driven precision medicine platform; the company recently raised its full-year 2025 revenue guidance to a range of $75 million to $77 million, representing year-over-year growth of up to 18%, which is solid, but you have to pair that with the expected full-year Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization-a proxy for operational cash flow) loss of between $39 million and $41 million.

This is a classic growth-at-a-cost scenario: they are demonstrating strong operational leverage, hitting an adjusted gross margin of 73.1% in Q3 2025, but the net IFRS loss for that quarter was still a hefty $20.0 million, so the real analysis is mapping their path to profitability, which management projects will approach adjusted EBITDA breakeven by the end of 2026.

Revenue Analysis

You want to know where SOPHiA GENETICS SA (SOPH) is making its money, and the simple answer is: the core platform is accelerating, but you need to watch the BioPharma segment closely. The company has significantly increased its full-year revenue guidance, now expecting to land between $75 million and $77 million for the 2025 fiscal year. That's a solid projected year-over-year growth rate of 15% to 18%, which is a strong signal of commercial traction in the precision medicine space.

Here's the quick math: the reacceleration is real. They posted Q3 2025 revenue of $19.5 million, which was a 23% increase year-over-year. This follows Q2 2025 revenue of $18.3 million, which grew 16% year-over-year. That sequential acceleration is what an analyst defintely wants to see in a growth stock.

The primary revenue source is the SOPHiA DDM™ (Data-Driven Medicine) platform, an AI-powered service that analyzes complex genomic and multimodal data. This is essentially a subscription-based service model for their global network of hospitals, labs, and biopharma institutions.

The revenue streams boil down to two key customer segments and their recent performance:

• Core Genomics Customers: This is the bread and butter-hospitals and clinical labs using the platform for diagnostics. Revenue from this core business, excluding BioPharma, grew an impressive 20% year-over-year in Q2 2025.
• BioPharma Customers: This segment involves partnerships with pharmaceutical companies, like the massive new contract with AstraZeneca (AZ) signed in Q2 2025. Revenue recognition from this major deal is expected to start primarily in Q4 2025, which is a significant change in the revenue mix.

What this estimate hides is the regional concentration of growth. The U.S. market is a major driver, delivering 30% year-over-year revenue growth in Q3 2025. Also, the Asia Pacific (APAC) region saw a 35% year-over-year analysis volume growth in Q3 2025, showing strong international expansion.

The increasing adoption of new applications, specifically the Liquid Biopsy offering, is a clear change in the revenue stream composition, driving both new customer signings and growth with existing clients. The average contract value for new signings in Q3 2025 was up a staggering 180% year-over-year, which speaks volumes about the shift toward larger enterprise accounts.

Here's a snapshot of the reaccelerating growth trajectory based on the most recent 2025 data:

To dive deeper into the financial health of the company, especially how this top-line growth impacts the bottom line, you should read our full analysis: Breaking Down SOPHiA GENETICS SA (SOPH) Financial Health: Key Insights for Investors.

Profitability Metrics

When you look at SOPHiA GENETICS SA (SOPH)'s profitability, the story is one of high-quality revenue growth paired with heavy investment, which is typical for a high-growth, platform-based health-tech company. You are seeing excellent gross margins, but the company is defintely still in its pre-profitability phase, prioritizing market share and platform development over near-term net income.

For the full fiscal year 2025, the company's guidance points to total revenue between $75 million and $77 million. I will use the midpoint of $76 million for our calculations. The critical takeaway is that SOPHiA GENETICS SA is demonstrating strong operational efficiency, but the operating and net losses show the significant cash burn required to scale its AI-driven platform.

Trends in Profitability and Operational Efficiency

The trend in profitability is a classic growth-stage narrative: gross margin expansion alongside widening net losses. The company's adjusted gross margin is a major strength, with Q2 2025 hitting 74.4% and Q1 2025 reaching 75.7%. This margin is better than peers like Myriad Genetics, which posted an adjusted gross margin of 70.1% in Q3 2025. This high gross margin reflects the core strength of SOPHiA GENETICS SA's cloud-native platform (SOPHiA DDM™) and its software-as-a-service (SaaS) model, which benefits from operating leverage as customer volume increases.

What this estimate hides is the significant investment in Research & Development (R&D) and Selling, General & Administrative (SG&A) expenses. The company's net profit margin remains negative. For the nine months ended September 30, 2025, the reported IFRS net loss was $59.82 million. This persistent, substantial loss is a direct result of fueling growth, not a sign of a broken business model. Management expects to be approaching adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) breakeven by the end of 2026 and crossing over to positive adjusted EBITDA in the second half of 2027.

• Gross margin is a clear competitive advantage.
• Losses have grown at roughly 4% per year over the last five years.
• The path to profitability is tied to scaling the existing platform and cost discipline.

For context, the median public SaaS company, which SOPHiA GENETICS SA's platform closely resembles, had a median EBITDA margin of 6% and a median net margin of 2% as of Q3 2024, showing that profitable software companies exist in the market. SOPHiA GENETICS SA's negative -52.6% operating margin proxy shows a substantial gap, but it also underscores the company's focus on a land-and-expand strategy in a high-growth, high-risk sector. You have to be comfortable with the burn rate for the potential long-term payoff. You can read more about the company's long-term vision here: Mission Statement, Vision, & Core Values of SOPHiA GENETICS SA (SOPH).

Debt vs. Equity Structure

You're looking at SOPHiA GENETICS SA (SOPH) and trying to figure out if their growth is funded by smart debt or dilutive equity. The short answer is they're using a calculated mix, but the debt side has seen a significant, recent uptick to fuel their expansion, a move typical of high-growth, pre-profit companies.

As of the second quarter of 2025, SOPHiA GENETICS SA's total debt stood at approximately $63.8 million. This breaks down into a small portion of short-term debt and capital lease obligations at $2.485 million, and the bulk as long-term debt and capital lease obligations at $61.328 million.

Here's the quick math on their leverage, or how much they use debt versus shareholder money (equity), for financing:

• Total Debt (Q2 2025): $63.8 million
• Total Stockholders Equity (Q2 2025): $76.692 million
• Debt-to-Equity Ratio: 0.83

A Debt-to-Equity (D/E) ratio of 0.83 means the company is using 83 cents of debt for every dollar of equity. To be fair, this is a relatively high D/E ratio when compared to the average for the Biotechnology industry, which often sits around 0.17. This tells me SOPHiA GENETICS SA is more leveraged than many of its peers, which isn't necessarily a red flag for a growth company, but it's defintely a risk factor to monitor.

The recent financing activity explains this jump in leverage. In Q2 2025, SOPHiA GENETICS SA drew an additional tranche of $35 million from the five-year senior secured credit facility they established with Perceptive Advisors. This debt financing, which totals up to $50 million, is a strategic choice to fund operations and growth initiatives without immediately diluting existing shareholders through a new equity raise. This is a classic growth-stage playbook: use non-dilutive debt to bridge the gap to profitability.

The company is balancing debt and equity funding by favoring debt for near-term capital needs, especially since they finished Q2 2025 with a strong cash position of $94.8 million in cash and cash equivalents. Still, the underlying shareholder equity of $76.692 million remains the foundational capital, largely stemming from their initial public offering (IPO) and prior funding rounds. They are essentially leveraging a strong cash balance and credit facility to push toward their stated goal of approaching adjusted EBITDA breakeven by the end of 2026. The company does not appear to have a formal credit rating from a major agency, which is common for a company at this stage.

For a deeper dive into who is betting on their equity, you should check out Exploring SOPHiA GENETICS SA (SOPH) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You want to know if SOPHiA GENETICS SA (SOPH) has enough cash to cover its near-term bills and fund its growth. The short answer is yes, but it's still burning cash to fuel its expansion, so you need to look closely at the cash flow statement.

The company's liquidity position is strong, which you can see in its Current Ratio (current assets divided by current liabilities). For the quarter ended June 2025, SOPHiA GENETICS SA (SOPH) reported a Current Ratio of 3.39. This means for every dollar of short-term debt, the company has $3.39 in assets it can convert to cash within a year. To be fair, this ratio is down slightly from the December 2024 figure of 3.71, but a ratio above 1.0 is generally good, and 3.39 ranks better than 82.39% of its peers in the Healthcare Providers & Services industry.

Here's the quick math: a high Current Ratio is a clear strength, signaling a healthy working capital position (current assets minus current liabilities). It gives SOPHiA GENETICS SA (SOPH) a comfortable buffer to manage its day-to-day operations and unexpected costs. Still, a ratio this high can sometimes suggest capital isn't being used aggressively enough for growth, but in a high-growth, pre-profitability company, that liquidity cushion is defintely a good thing.

The core of the liquidity story, however, is in the cash flow statements. SOPHiA GENETICS SA (SOPH) is a growth-stage company, so it continues to post negative cash flow from operating activities-a cash burn. In the second quarter of 2025, the cash burn improved 35% year-over-year to $8.7 million, which shows good progress on cost management. You can see the full picture of their cash movements in the table below.

The company ended Q2 2025 with a strong cash and cash equivalents balance of $94.8 million, which was boosted by drawing $35 million from its credit facility with Perceptive Advisors. This financing activity is a clear indication that while the business model is scaling (with full-year revenue expected between $75 million and $77 million), it still needs external capital to cover the Adjusted EBITDA loss, which was $10.2 million in Q3 2025. This is the key liquidity concern: the company is still losing money, but they have a clear runway and are forecasting to approach adjusted EBITDA breakeven by the end of 2026.

For a deeper dive into who is betting on this strategy, you should check out Exploring SOPHiA GENETICS SA (SOPH) Investor Profile: Who's Buying and Why?

• Monitor cash burn rate against the $94.8 million cash balance.
• Track progress toward the 2026 adjusted EBITDA breakeven target.
• Confirm that the high Current Ratio doesn't signal overly conservative capital use.

The company's liquidity is sound for now, but its long-term solvency hinges on hitting that profitability milestone.

Valuation Analysis

You're looking at SOPHiA GENETICS SA (SOPH), a company in the high-growth, data-driven medicine space, and the simple truth is that traditional valuation metrics are currently distorted by its growth-stage losses. The consensus from Wall Street analysts is a 'Hold' rating, but with a significant potential upside, suggesting a near-term risk-reward balance you need to weigh carefully.

The company is currently unprofitable, so ratios like Price-to-Earnings (P/E) and Enterprise Value-to-EBITDA (EV/EBITDA) are not meaningful in the usual sense. For the 2025 fiscal year, analysts forecast a full-year Earnings Per Share (EPS) of approximately -$0.9384, which is why the P/E ratio is effectively 0.00 or 'Not Applicable' (n/a).

Here's the quick math on what we can use:

• Price-to-Book (P/B): SOPH's P/B ratio is 4.35. This is a high multiple, telling you the market is willing to pay over four times the company's book value, which is common for asset-light, high-growth software companies with significant intellectual property.
• Price-to-Sales (P/S): The P/S ratio is 3.56, based on a market capitalization of roughly $263.93 million and a full-year 2025 revenue estimate of $75.68 million. To be fair, this P/S is considered expensive compared to its estimated fair value and the US Healthcare Services industry average.
• EV/EBITDA: This is n/a, as the company is not yet generating positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).

The market is defintely pricing SOPH on future revenue growth, not current profits. This is a high-conviction growth play.

Looking at the stock's recent performance, the price has seen a positive trend, increasing by +18.96% over the last 52 weeks. Still, the share price has been volatile compared to the broader US market, which is typical for a stock with a beta of 1.11. This higher beta means the stock price volatility has been greater than the market average, so expect bigger swings.

SOPH does not pay a dividend, which is standard for a growth company focused on reinvesting all capital back into the business to fuel expansion.

The analyst community is split but leans toward a positive outlook. Of the analysts covering SOPH, the consensus rating is a 'Hold,' with 2 buy ratings and 1 sell rating. The average 12-month price target is $9.00, with a high target of $11.00 and a low of $7.00. This average target suggests a massive forecasted upside of over 131% from a recent price of $3.89, which is a significant opportunity if the company executes on its growth plan.

What this estimate hides is the execution risk inherent in a pre-profit company; they must hit their revenue targets, like the projected 2025 revenue of $75.68 million, to justify that target price. For a deeper dive into the company's operational health, you can check out the full post at Breaking Down SOPHiA GENETICS SA (SOPH) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at SOPHiA GENETICS SA (SOPH), a company with strong growth momentum, but you can't ignore the financial realities of an AI-driven precision medicine business. The core risk here is a classic growth-stage dilemma: they are spending heavily to win market share, so the path to profitability is still a multi-year journey. You need to map the near-term financial risks alongside the longer-term structural challenges.

The most immediate operational risk is the cash burn. For the full 2025 fiscal year, SOPHiA GENETICS SA is guiding for an Adjusted EBITDA loss between $39 million and $41 million. This high level of loss, even with Q3 2025 revenue hitting $19.5 million, means the company is heavily reliant on its existing capital to fund operations and R&D. They are defintely showing 'strong operating leverage' and 'rigorous cost discipline,' but that loss number is the one to watch.

Here's a quick look at the major risks and the company's stated mitigation plans:

• Financial Risk: Net Loss & Cash Burn: The Q3 2025 Net IFRS Loss was $20.0 million. The company is targeting adjusted EBITDA breakeven by the end of 2026, which is an aggressive, but necessary, goal.
• Currency and Cost Volatility: The 2025 adjusted EBITDA loss guidance already factors in headwinds from the appreciation of the Swiss Franc against the U.S. Dollar. Plus, they are dealing with 'elevated Swiss social charges on equity-based compensation.'
• Regulatory and Data Security Risk: As a global leader in data-driven medicine, SOPHiA GENETICS SA is constantly exposed to stringent privacy and information security laws (like HIPAA and GDPR). Any misstep here, or a delay in obtaining regulatory clearances for their software as a medical device (SaMD) applications, could severely impact their ability to sell new products.

The competitive landscape is also a real factor. The genomics and AI-in-healthcare space is crowded with both large, established players and nimble, well-funded startups. SOPHiA GENETICS SA's strategy is to 'land and expand,' which means they must continually prove the value of their SOPHiA DDM™ platform against rivals to drive up usage and customer contract value-the average contract value of new signings in Q3 2025 was up 180% year-over-year, which is a great sign, but they have to keep that momentum going.

What this estimate hides is the inherent risk in their 'land and expand' model: if a customer doesn't adopt more applications after the initial sale, the revenue growth stalls. They have to keep onboarding and expanding their customer base, which reached 488 core genomics customers as of September 30, 2025.

For a deeper dive into who is betting on this growth story, check out Exploring SOPHiA GENETICS SA (SOPH) Investor Profile: Who's Buying and Why?

To summarize the financial risks you should track:

Growth Opportunities

You're looking at SOPHiA GENETICS SA (SOPH) and seeing a high-growth story that still burns cash, and you need to know if the underlying drivers are strong enough to justify the price. The short answer is that the company's growth is accelerating, fueled by a powerful platform model and strategic partnerships, but the path to profitability still requires tight execution.

For the full fiscal year 2025, SOPHiA GENETICS SA has guided for revenue in the range of $75 million to $77 million, representing a year-over-year growth of 15% to 18%. This top-line momentum is what matters most right now, even as the company manages an expected Adjusted EBITDA loss between $39 million and $41 million for the year. The entire investment thesis hinges on converting this rapid revenue growth into operating leverage, which they expect will lead to approaching adjusted EBITDA breakeven by the end of 2026.

Key Growth Drivers and Product Innovations

The company's growth isn't just about adding more customers; it's about selling more sophisticated, higher-value applications to its growing network of institutions. This is defintely the core of the strategy.

• Platform Adoption and Scale: The SOPHiA DDM™ platform performed a record 99,000 analyses in Q3 2025, and the core genomics customer base reached 488 as of September 30, 2025.
• Higher-Value Applications: The liquid biopsy application, MSK-ACCESS® powered with SOPHiA DDM™, is a major revenue driver, carrying a higher-than-average selling price and gaining significant adoption.
• Digital Twins: The October 2025 launch of SOPHiA DDM™ Digital Twins, a research technology that creates virtual patient representations for oncology, positions them at the forefront of AI-driven clinical research.

Plus, new business momentum is strong: they signed 31 new customers in Q3 2025, and the average contract value of those new signings increased by a massive 180% year-over-year. That's a clear signal of enterprise-level traction.

Strategic Partnerships and Market Expansion

The company is strategically expanding its reach both geographically and through key biopharma partnerships. This dual approach hedges against concentration risk and accelerates platform validation.

The biggest near-term opportunity is the multi-year AI breast cancer partnership expansion with AstraZeneca, which leverages the SOPHiA GENETICS SA network and AI capabilities for real-world evidence generation. Also, the company is making smart moves in the diagnostic space, like the September 2025 partnership with Myriad Genetics to develop a liquid biopsy companion diagnostic offering.

Here's a quick look at the geographic expansion, showing where the platform is gaining traction:

Competitive Advantages

SOPHiA GENETICS SA's competitive edge isn't about running its own labs; it's about being the neutral, cloud-native operating system for precision medicine. This is a critical distinction from competitors like Guardant Health or Tempus, who are primarily centralized testing providers.

The SOPHiA DDM™ platform (Data-Driven Medicine) is a true competitive moat because it's decentralized and technology-agnostic. It works with over 800 hospitals and labs in more than 70 countries, and crucially, it integrates with existing lab equipment. This makes adoption easier and faster for new customers, which is why the company's global reach is a sustainable advantage that will be difficult for US-centric rivals to displace. If you want to dive deeper into who is betting on this model, you should read Exploring SOPHiA GENETICS SA (SOPH) Investor Profile: Who's Buying and Why?.