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

Are you keeping a close watch on SOPHiA GENETICS SA (SOPH) and wondering about its financial stability? In 2024, the company reported a revenue of $65.2 million, marking a 4% increase year-over-year, or 5% growth on a constant currency basis excluding COVID-19-related revenue. With a gross margin of 67.4% (72.8% adjusted) and an operating loss of $66.6 million ($44.8 million adjusted), how should investors interpret these figures? Dive in to uncover key insights into SOPH's financial health, including its strategic moves, challenges, and future outlook.

SOPHiA GENETICS SA (SOPH) Revenue Analysis

Understanding SOPHiA GENETICS SA (SOPH)'s revenue streams is crucial for investors. A detailed analysis provides insights into the company's financial health and growth potential. In 2024, SOPHiA GENETICS reported significant progress in several key areas.

Here's a breakdown of SOPHiA GENETICS SA (SOPH)’s revenue streams:

• Primary Revenue Sources: The company generates revenue primarily from its SOPHiA DDM™ Platform, which standardizes, computes, and analyzes digital health data. Additional revenue comes from workflow equipment and services.
• Geographic Distribution: SOPHiA GENETICS operates internationally, with revenues mainly in U.S. dollars, euros, and Swiss francs, and to a lesser extent in British pounds, Australian dollars, Brazilian reals, Turkish lira, and Canadian dollars, depending on customer locations.

For the fiscal year 2024, SOPHiA GENETICS reported the following:

• Revenue: $65.2 million, reflecting a 4% year-over-year increase, or 5% on a constant currency basis excluding COVID-19-related revenue.
• Analysis Volume: A record of 352,000 analyses performed, representing an 11% year-over-year volume growth, or 13% excluding COVID-related volumes.
• Customer Growth: Reached 472 core genomics customers by December 31, 2024, up from 450 at the end of Q4 2023.

The company's revenue streams can be further detailed in the following table:

Year-over-year revenue growth for SOPHiA GENETICS has shown varied trends:

• 2024: 4.49% growth, with annual revenue of $65.17 million.
• 2023: 31.14% growth, with annual revenue of $62.37 million.
• 2022: 17.58% growth, with annual revenue of $47.56 million.

The company has also provided a financial outlook for 2025, expecting revenue between $72 million and $76 million, which would represent a growth of approximately 10% to 17% compared to fiscal year 2024.

SOPHiA GENETICS has seen strong analysis volume growth in NORAM and APAC, with 33% and 40% year-over-year growth, respectively, in 2024.

Explore more about SOPHiA GENETICS SA (SOPH) and its investor profile: Exploring SOPHiA GENETICS SA (SOPH) Investor Profile: Who’s Buying and Why?

SOPHiA GENETICS SA (SOPH) Profitability Metrics

Analyzing the profitability of SOPHiA GENETICS SA (SOPH) involves examining several key metrics to understand its financial health and operational efficiency. Here's a detailed look at the company's gross profit, operating profit, and net profit margins, along with trends and comparisons.

For the full year 2024, SOPHiA GENETICS reported:

• Revenue of $65.2 million, a 4% year-over-year increase (or 5% on a constant currency basis excluding COVID-19 related revenue).
• Gross margin of 67.4% (reported) and 72.8% (adjusted), compared to 68.8% and 72.2% in the prior year.
• Operating loss of $66.6 million (reported) and $44.8 million (adjusted), showing year-over-year improvements of 11% and 20%, respectively.

In the fourth quarter of 2024, the company reported:

• Revenue of $17.7 million, up 4% year-over-year (or 6% on a constant currency basis excluding COVID-19 related revenue).
• Gross margin of 68.2% (reported) and 74.2% (adjusted), compared to 69.8% and 73.4% in the prior year period.
• Operating loss of $17.4 million (reported) and $10.2 million (adjusted), representing year-over-year improvements of 8% and 23%, respectively.

SOPHiA GENETICS has demonstrated improvements in cost management. For example, the adjusted gross margin reached 72.8%, a 60 basis point increase due to initiatives aimed at expanding data compute capability. The adjusted operating loss also improved by 20% year-over-year, reflecting enhanced efficiency across teams.

While SOPHiA GENETICS has shown revenue growth and improvements in operating losses, it's important to note the net profit margin. The company's profit margin was -116.3% in Q3 2024 . Additionally, for the year 2024, the net loss was $62.49 million, with a diluted EPS of -$0.95.

Here's a summary of key financial data:

For more detailed insights, you can refer to Breaking Down SOPHiA GENETICS SA (SOPH) Financial Health: Key Insights for Investors.

SOPHiA GENETICS SA (SOPH) Debt vs. Equity Structure

Understanding how a company finances its operations is crucial for investors. This section examines SOPHiA GENETICS SA (SOPH)’s debt levels, its debt-to-equity ratio, and how it balances debt and equity to fund its growth. A balanced approach is vital for sustainable financial health and long-term success. Mission Statement, Vision, & Core Values of SOPHiA GENETICS SA (SOPH).

As of December 31, 2024, SOPHiA GENETICS SA (SOPH) had a total debt of $30.03 million USD. This debt is composed of both short-term and long-term liabilities. The company's long-term debt was reported at $13.24 million for the fiscal year ending on that date.

The debt-to-equity ratio is a key metric for assessing a company's financial leverage. For SOPHiA GENETICS SA (SOPH), the debt-to-equity ratio stands at 13.7%, calculated from a total shareholder equity of $96.5 million and total debt of $13.2 million. However, it's important to note that other data indicates a total debt of $30.03 million and equity of $96.49 million, resulting in a debt-to-equity ratio of approximately 0.31.

To provide a clearer picture, here’s a summary of SOPHiA GENETICS SA (SOPH)'s key balance sheet figures:

Recent activity includes a term loan agreement with Perceptive Advisors, providing access to $50.0 million in term loans. This includes an initial tranche of $15.0 million and a potential additional $35.0 million available until March 31, 2026, subject to certain conditions. These loans, maturing five years from the closing date, accrue interest at Term SOFR plus 6.25% annually, which could increase to Term SOFR plus 9.25% during default.

SOPHiA GENETICS SA (SOPH) appears to maintain a careful approach to balancing debt and equity. The company held $105.4 million in cash as of June 2024, which exceeds its current liabilities of $28.6 million and long-term liabilities of $31.0 million. This suggests the company has sufficient liquid assets to cover its obligations.

SOPHiA GENETICS SA (SOPH) Liquidity and Solvency

Analyzing SOPHiA GENETICS SA (SOPH)'s financial health requires a close look at its liquidity and solvency, which indicate its ability to meet short-term and long-term obligations, respectively. Several key financial metrics and statements provide insights into these aspects.

Assessing SOPHiA GENETICS SA (SOPH)'s Liquidity:

Liquidity ratios offer a snapshot of a company's ability to cover its immediate liabilities with its current assets. Two common ratios are the current ratio and the quick ratio.

• Current Ratio: This ratio is calculated by dividing current assets by current liabilities. A current ratio of around 1.5 to 2.0 is generally considered healthy, indicating that the company has enough liquid assets to cover its short-term liabilities.
• Quick Ratio: Also known as the acid-test ratio, this is calculated by subtracting inventory from current assets and dividing the result by current liabilities. It provides a more conservative view of liquidity by excluding inventory, which may not be easily convertible to cash. A quick ratio of 1.0 or higher is often preferred.

Working Capital Trends:

Monitoring the trend in working capital (current assets minus current liabilities) is crucial. A positive and increasing working capital balance typically suggests improving liquidity. Conversely, a negative or declining balance may signal potential liquidity issues.

Cash Flow Statements Overview:

The cash flow statement is vital for understanding the movement of cash both into and out of a company. It is divided into three main sections:

• Operating Activities: This section shows the cash generated from the company's core business operations. Consistent positive cash flow from operations is a healthy sign.
• Investing Activities: This section includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E). These cash flows often represent investments in the company's future.
• Financing Activities: This section involves cash flows related to debt, equity, and dividends. It shows how the company is funding its operations and returning value to shareholders.

Potential Liquidity Concerns or Strengths:

To determine potential liquidity concerns or strengths, consider the following:

• Consistent Negative Cash Flow from Operations: This could indicate an inability to generate enough cash from core business activities to cover operating expenses.
• High Levels of Debt: Large debt obligations can strain liquidity, especially if the debt matures in the short term.
• Decreasing Cash Reserves: A rapid decline in cash reserves may signal that the company is struggling to manage its cash flow effectively.
• Strong Cash Position: A robust cash balance, coupled with positive cash flow from operations, indicates a strong liquidity position.

For additional insights into the company's values and objectives, refer to: Mission Statement, Vision, & Core Values of SOPHiA GENETICS SA (SOPH).

SOPHiA GENETICS SA (SOPH) Valuation Analysis

Determining whether SOPHiA GENETICS SA (SOPH) is overvalued or undervalued requires a multifaceted approach, considering various financial ratios, stock performance, and analyst opinions. Key valuation metrics such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) are essential tools. However, it's important to note that SOPH, as a growth-oriented company in the healthcare technology sector, may not always have positive earnings, making the P/E ratio less relevant. Instead, investors often focus on revenue growth, gross margin, and cash burn rate.

Here's a breakdown of factors to consider:

• Price-to-Earnings (P/E) Ratio: Given that SOPHiA GENETICS SA might not have consistent positive earnings, the P/E ratio may not be the most reliable indicator.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. It can indicate whether a stock is overvalued by comparing its market value to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): EV/EBITDA can provide a clearer picture of valuation, especially for companies with significant debt or those that are not yet profitable. It assesses the company's total value relative to its earnings before interest, taxes, depreciation, and amortization.

Analyzing SOPH's stock price trends over the last 12 months (or longer) provides insights into market sentiment and investor confidence. Significant price volatility could suggest uncertainty, while a steady upward trend may indicate growing confidence. As of market close April 18, 2025, SOPH is trading at $1.74. Year-to-date, SOPH's performance shows a -29.51% change, and over the past year, the stock has seen a -79.11% change.

Dividend yield and payout ratios are not applicable in SOPH's case, as the company does not currently offer dividends.

Analyst consensus on SOPH's stock valuation can offer additional perspectives. These ratings typically range from 'buy' to 'hold' to 'sell,' reflecting analysts' expectations for the stock's future performance. For example, on April 15, 2024, analysts at HC Wainwright reaffirmed a 'Buy' rating on SOPH, setting a price target of $7.00.

To make an informed decision about SOPH's valuation, consider the following:

• Review Financial Statements: Examine SOPH's annual and quarterly reports for detailed financial data.
• Compare with Peers: Analyze SOPH's valuation ratios against those of its competitors in the healthcare technology sector.
• Consider Growth Prospects: Evaluate the company's potential for future growth, considering factors such as market trends, technological advancements, and competitive landscape.

Here is a table summarizing key stock information for SOPHiA GENETICS SA:

Keep in mind that valuation is not an exact science, and it's essential to consider both quantitative and qualitative factors when assessing whether SOPHiA GENETICS SA is overvalued or undervalued. You might also be interested in reading about Mission Statement, Vision, & Core Values of SOPHiA GENETICS SA (SOPH).

SOPHiA GENETICS SA (SOPH) Risk Factors

Several factors could significantly impact SOPHiA GENETICS SA (SOPH)'s financial health. These risks span from internal operational challenges to external market dynamics. Understanding these potential pitfalls is crucial for investors.

Here's an overview of internal and external risks that could affect the company:

• Industry Competition: The landscape of genomics and diagnostics is intensely competitive. New entrants and established players continually vie for market share, potentially squeezing SOPHiA GENETICS' profitability.
• Regulatory Changes: Healthcare regulations are constantly evolving. Changes in data privacy laws, reimbursement policies, or diagnostic testing approvals could create hurdles for SOPHiA GENETICS, increasing compliance costs and potentially delaying market access for its products.
• Market Conditions: Economic downturns or shifts in healthcare spending priorities could reduce demand for SOPHiA GENETICS' services. Additionally, fluctuations in currency exchange rates can impact revenue, especially from international markets.

Investors should pay close attention to the risks highlighted in SOPHiA GENETICS' recent earnings reports and filings. These documents often provide detailed insights into the company's specific challenges and concerns. Examples may include:

• Operational Risks: Difficulties in scaling operations, managing data security, or maintaining the quality of its AI-driven analytics platform.
• Financial Risks: Challenges in achieving profitability, managing cash flow, or securing additional funding if needed.
• Strategic Risks: Failure to effectively execute its growth strategy, adapt to technological advancements, or maintain its competitive edge.

Mitigation strategies are crucial for addressing these risks. While specific plans vary, common approaches include:

• Diversification: Expanding into new markets or service offerings to reduce reliance on specific areas.
• Innovation: Continuously investing in research and development to stay ahead of the competition.
• Strategic Partnerships: Collaborating with other companies to expand reach and capabilities.
• Cost Management: Implementing measures to improve efficiency and reduce expenses.

For more in-depth insights, see: Breaking Down SOPHiA GENETICS SA (SOPH) Financial Health: Key Insights for Investors

SOPHiA GENETICS SA (SOPH) Growth Opportunities

SOPHiA GENETICS SA (SOPH) is focusing on several key areas to drive future growth, including product innovation, market expansion, strategic partnerships, and leveraging its competitive advantages.

Key growth drivers for SOPHiA GENETICS SA (SOPH) include:

• Product Innovations: Continued development and enhancement of its SOPHiA DDM platform to offer more comprehensive and efficient data analysis solutions for genomic and clinical data.
• Market Expansions: Extending its reach into new geographic markets and expanding its presence in existing markets by targeting new customer segments such as biopharma companies and research institutions.
• Strategic Initiatives and Partnerships: Forming collaborations with other healthcare providers, technology companies, and research organizations to broaden its product offerings and market access.
• Competitive Advantages: Leveraging its advanced technology, extensive data library, and established customer base to maintain a competitive edge in the genomic data analysis market.

While specific future revenue growth projections and earnings estimates beyond 2024 are not available, several strategic initiatives and partnerships are expected to drive future growth for SOPHiA GENETICS SA (SOPH). These may include:

• Expanding the applications of the SOPHiA DDM platform into new areas such as drug discovery and personalized medicine.
• Developing new data analysis tools and algorithms to improve the accuracy and efficiency of genomic data interpretation.
• Increasing the company’s sales and marketing efforts to attract new customers and expand its market share.

The following table summarizes key financial data for SOPHiA GENETICS SA (SOPH) based on available information. Please note that these figures reflect the most recent data and may not include future projections.

SOPHiA GENETICS SA (SOPH) competitive advantages that position the company for growth are:

• Proprietary Technology: SOPHiA DDM platform provides advanced data analytics and interpretation capabilities.
• Extensive Data Library: A large and growing database of genomic and clinical data enhances the accuracy and insights of its analyses.
• Established Customer Base: A strong network of healthcare providers and research institutions provides a solid foundation for continued growth.

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