BOSTON and ROLLE, Switzerland, Aug. 4, 2026 /PRNewswire/ -- SOPHiA GENETICS (Nasdaq: SOPH), a global leader in AI-driven precision medicine, today reported financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Financial Highlights
-- Revenue was $23.3 million, up 27% year-over-year
-- Gross margin was 64.6% on a reported basis and 72.1% on an adjusted basis,
compared to 67.0% reported and 74.4% adjusted in the prior year period
-- Net loss was $22.4 million, flat year-over-year; Adjusted EBITDA loss was
$8.8 million, improving 27% year-over-year
-- The company is raising 2026 revenue guidance to a range of $94 million to
$96 million, representing 22% to 24% year-over-year growth. This compares
to the prior range of $92 million to $94 million
"We delivered an outstanding second quarter, growing revenue 27% year-over-year, while also improving adjusted EBITDA loss by 27%," said Ross Muken, Chief Executive Officer of SOPHiA GENETICS. "Strong revenue performance was driven by 60% volume growth in the U.S., 70% volume growth in Liquid Biopsy, and accelerating growth in BioPharma. BioPharma growth is well-positioned to continue into 2027, as today we announce the signing of two companion diagnostic programs with AstraZeneca, the first ever in SOPHiA GENETICS's history."
Muken added, "As I step into the role of CEO, my focus will be on converting our world-class AI platform, a hard-won global network, and a decade of scientific credibility into accelerating, profitable growth for years to come. To achieve these goals, we strengthened our balance sheet with an oversubscribed $57.5 million public offering in Q2, providing sufficient capital to reach our business objectives and invest in long-term growth."
Business Highlights
Expanding with existing customers
-- Performed a record 115,000 analyses on SOPHiA DDM$(TM)$, representing 22% year-over-year volume growth -- Delivered strong analysis volume in North America with 60% year-over-year growth in the U.S. -- Expanded our footprint with existing customers as Net Dollar Retention increased to 117% in Q2 2026, up from 107% in Q2 2025 -- Reached 542 core genomics customers as of June 30, 2026, up from 490 customers a year ago
Landing new customers to fuel future growth
-- Signed 24 new core genomic customers in Q2 2026, which are expected to
begin generating revenue over the next twelve months
-- Continued to sign premier healthcare institutions across the globe,
including Nova Scotia Health Authority for HemOnc; DB Diagnósticos,
Brazil's leading laboratory-support network, for Rare Disorders; and IPO
Lisboa, the main cancer center for southern Portugal, for Hereditary
Cancer
Accelerating growth in the U.S. market
-- Delivered 64% year-over-year revenue growth in the U.S. in Q2 2026 and
60% volume growth
-- Completed new customer go-lives for Geisinger Health System in
Pennsylvania for Pharmacogenomics, University of Illinois at Chicago for
HemOnc, and NYU Langone Health for Solid Tumors
-- Signed a strategic collaboration with Children's Hospital of Philadelphia
(CHOP), the nation's first pediatric hospital and a global leader in
pediatric oncology, to develop and launch a next-generation liquid biopsy
application specifically designed for pediatric cancers
Scaling growth with new applications
-- Delivered 80% year-over-year revenue growth in Liquid Biopsy in Q2 2026
-- Reached a total of 80 customers across 30+ countries signed-to-adopt the
Liquid Biopsy application MSK-ACCESS$(R)$ powered with SOPHiA DDM(TM), with
more than half still yet-to-complete implementation
-- Signed major new customers to MSK-ACCESS(R) in Q2, including AZ Delta
Roeselare, one of the largest hospitals in Belgium; Policlinico Riuniti
Hospital at the University of Foggia in Italy; and Sultan Qaboos Cancer
Center in Oman
-- Signed major new customers to the Solid Tumor application MSK-IMPACT(R)
powered with SOPHiA DDM(TM), including Lifera Omics in Saudi Arabia; CHU
Lyon Sud of Hospices Civils de Lyon in France; and Bioma Genetics in
Brazil
Developing partnerships to fuel growth
-- Signed a Memorandum of Understanding (MOU) with Memorial Sloan Kettering
Cancer Center (MSK) to establish a joint venture combining MSK's clinical
expertise with SOPHiA GENETICS's AI-native platform to accelerate the
next generation of precision oncology
-- The envisioned joint venture aims to build an 'AI Lab of the Future' with
infrastructure to develop and launch new applications, support BioPharma
partners, and build new multimodal clinical intelligence tools
Building BioPharma partnerships
-- Signed a new, multi-year agreement with AstraZeneca to launch two
companion diagnostic (CDx) programs: (1) a decentralized Solid Tumor CDx,
and (2) a Hematological Oncology test for patients with blood cancer
-- Delivered strong growth from BioPharma partners in Q2 2026 as recently
signed projects with AstraZeneca, Kartos, and others begin to generate
revenue
Driving operational excellence
-- Remained laser-focused on operational excellence and improved adjusted
EBITDA loss by 27% year-over-year to $8.8 million
-- Executed an oversubscribed public offering that raised approximately
$57.5 million in gross proceeds, bringing cash and cash equivalents to
$107.7 million at the end of Q2 2026; The company expects it now has
sufficient capital resources to fund its growth objectives
-- Executed targeted cost actions in Q2, modestly reducing headcount and
operating spend as AI-driven productivity improvements enabled us to
streamline workflows while maintaining investment in key growth areas
-- Reaffirmed commitment to profitable growth and the expectation of
approaching adjusted EBITDA breakeven by the end of 2026 and crossing
over to positive adjusted EBITDA in the second half of 2027
2026 Financial Outlook
Based on information as of today, SOPHiA GENETICS expects:
-- Full year revenue between $94 million and $96 million, representing
approximately 22% to 24% year-over-year growth. This compares to the
prior range of $92 million to $94 million
-- Adjusted EBITDA loss between $29 million and $32 million, compared to
$41.5 million in FY 2025
Earnings Call and Webcast Information
SOPHiA GENETICS will host a conference call and live webcast to discuss the second quarter 2026 results on Tuesday, August 4, 2026, at 8:00 a.m. (08:00) Eastern Time / 2:00 p.m. (14:00) Central European Time. The call will be webcast live on the SOPHiA GENETICS Investor Relations website, ir.sophiagenetics.com. Additionally, an audio replay of the conference call will be available on the SOPHiA GENETICS website after its completion.
Non-IFRS Financial Measures
Other than with respect to revenue, the Company only provides guidance on a non-IFRS basis. The Company does not provide a reconciliation of forward-looking adjusted gross margin (non-IFRS measure) to gross margin (the most comparable IFRS financial measure), due to the inherent difficulty in forecasting and quantifying amortization of capitalized research & development expenses that are necessary for such reconciliation. In addition, the Company does not provide a reconciliation of forward-looking adjusted EBITDA (non-IFRS measure) to loss for the period (the most comparable IFRS financial measure), due to the inherent difficulty in forecasting and quantifying depreciation expense, amortization of capitalized research & development expenses and intangible assets, interest income, interest expense, fair value adjustments on warrants, income taxes, foreign exchange gains or losses, share-based compensation expenses, social charges on share-based compensation, the non-cash portion of pensions paid in excess of actual contributions, certain transaction costs, litigation expenses and restructuring costs that are necessary for such reconciliation.
To provide investors with additional information regarding the company's financial results, SOPHiA GENETICS has disclosed here and elsewhere in this earnings release the following non-IFRS measures:
-- Adjusted gross profit, which the company calculates as revenue minus cost
of revenue adjusted to exclude amortization of capitalized research and
development expenses;
-- Adjusted gross profit margin, which the company calculates as adjusted
gross profit as a percentage of revenue;
-- Adjusted EBITDA, which the company calculates as loss for the period
before depreciation, amortization, interest income, interest expense,
fair value adjustments on warrant obligations, foreign exchange (losses)
gains, net, income tax (expense) benefit, share-based compensation
expense, social charges on share-based compensation, non-cash pension
expenses, certain transaction costs, litigation expenses and
restructuring costs.
These non-IFRS measures are key measures used by SOPHiA GENETICS management and board of directors to evaluate its operating performance and generate future operating plans. The exclusion of certain expenses facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain variable charges. Accordingly, the company believes that these non-IFRS measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors.
These non-IFRS measures have limitations as financial measures, and you should not consider them in isolation or as a substitute for analysis of SOPHiA GENETICS' results as reported under IFRS. Some of these limitations are:
-- These non-IFRS measures exclude the impact of depreciation. Although
depreciation is a non-cash charge, the assets being depreciated may need
to be replaced in the future and these non-IFRS measures do not reflect
capital expenditure requirements for such replacements or for new capital
expenditures;
-- These non-IFRS measures exclude the impact of interest expense. Interest
expense will continue to be for the foreseeable future a recurring
expense based on the company's financial liabilities;
-- These non-IFRS measures exclude the impact of interest income. Interest
income will continue to be for the foreseeable future recurring income
based on the company's financial assets;
-- These non-IFRS measures exclude the impact of income taxes. Income taxes
will continue to be for the foreseeable future a recurring expense
incurred in the various jurisdictions in which the company operates;
-- These non-IFRS measures exclude the impact of foreign exchange gains
(losses),net. Foreign exchange gains and losses will continue to be for
the foreseeable future a recurring expense incurred as the company
participates in transactions outside of the company's functional
currency;
-- These non-IFRS measures exclude the impact of fair value adjustments of
warrant obligations. Fair value adjustments on warrant obligations will
continue to be for the foreseeable future a recurring expense incurred as
the company has outstanding warrant obligations;
-- These non-IFRS measures exclude the impact of amortization of capitalized
research and development expenses and intangible assets. Amortization of
these assets will continue to be for the foreseeable future a recurring
expense incurred as the Company continues to invest in developing
revenue-generating products through research and development. Although
amortization is a non-cash charge, the assets being amortized may need to
be replaced in the future and these non-IFRS measures do not reflect
capital expenditure requirements for such replacements or for new capital
expenditures;
-- These non-IFRS measures exclude the impact of share-based compensation
expenses. Share-based compensation has been, and will continue to be for
the foreseeable future, a recurring expense in the company's business and
an important part of its compensation strategy;
-- These non-IFRS measures exclude the impact of social charges related to
share-based compensation. These social charges have been, and will
continue to be for the foreseeable future, a recurring expense in the
company's business;
-- These non-IFRS measures exclude the impact of the non-cash portion of
pensions paid in excess of actual contributions to match actuarial
expenses. Pension expenses have been, and will continue to be for the
foreseeable future, a recurring expense in the business;
-- These non-IFRS measures exclude the impact of certain capital markets
transaction costs. These costs may occur from time to time in the future
as needed to complete the transactions;
-- These non-IFRS measures exclude the impact of litigation expenses related
to the company's defense of lawsuits filed by Guardant Health. These
expenses are expected to continue for the duration of the litigation and
may increase in future periods;
-- These non-IFRS measures exclude the costs associated with restructuring,
which consists of compensation paid to employees during their garden
leave period, severance, and any other amounts legally owed to the
employees resulting from their termination as part of a planned workforce
reduction, which we undertook to optimize our operations. Additionally,
it includes any legal fees incurred as part of the restructuring process.
While such actions are not planned going forward as part of our regular
operations, we expect such expenses could still be incurred from time to
time based on corporate needs; and
-- Other companies, including companies in the company's industry, may
calculate these non-IFRS measures differently, which reduces their
usefulness as comparative measures.
Because of these limitations, you should consider these non-IFRS measures alongside other financial performance measures, including various cash flow metrics, net income and other IFRS results.
The tables below provide the reconciliation of the most comparable IFRS measures to the non-IFRS measures for the periods presented.
Presentation of Constant Currency Revenue
SOPHiA GENETICS operates internationally, and its revenues are generated primarily in the U.S. dollar, the euro and Swiss franc and, to a lesser extent, British pound, Australian dollar, Brazilian real, Turkish lira and Canadian dollar depending on the company's customers' geographic locations. Changes in revenue include the impact of changes in foreign currency exchange rates. We present the non-IFRS financial measure "constant currency revenue" (or similar terms such as constant currency revenue growth) to show changes in revenue without giving effect to period-to-period currency fluctuations. Under IFRS, revenues received in local (non-U.S. dollar) currencies are translated into U.S. dollars at the average monthly exchange rate for the month in which the transaction occurred. When the company uses the term "constant currency", it means that it has translated local currency revenues for the current reporting period into U.S. dollars using the same average foreign currency exchange rates for the conversion of revenues into U.S. dollars that we used to translate local currency revenues for the comparable reporting period of the prior year. The company then calculates the difference between the IFRS revenue and the constant currency revenue to yield the "constant currency impact" for the current period.
The company's management and board of directors use constant currency revenue growth to evaluate growth and generate future operating plans. The exclusion of the impact of exchange rate fluctuations provides comparability across reporting periods and reflects the effects of customer acquisition efforts and land-and-expand strategy. Accordingly, it believes that this non-IFRS measure provides useful information to investors and others in understanding and evaluating revenue growth in the same manner as the management and board of directors. However, this non-IFRS measure has limitations, particularly as the exchange rate effects that are eliminated could constitute a significant element of its revenue and could significantly impact performance and prospects. Because of these limitations, you should consider this non-IFRS measure alongside other financial performance measures, including revenue and revenue growth presented in accordance with IFRS and other IFRS results.
The table below provides the reconciliation of the most comparable IFRS growth measures to the non-IFRS growth measures for the current period.
About SOPHiA GENETICS
SOPHiA GENETICS (Nasdaq: SOPH) is an AI-native healthcare technology company on a mission to transform patient care by expanding access to data-driven medicine globally. It is the creator of SOPHiA DDM(TM), an AI platform that analyzes complex genomic and multimodal data to generate real-time, real-world insights for a broad global network of hospital, laboratory, and biopharma institutions. For more information, visit SOPHiAGENETICS.COM and connect with us on LinkedIn.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding SOPHiA GENETICS future results of operations and financial position, business strategy, products and technology, partnerships and collaborations, as well as plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements are based on SOPHiA GENETICS' management's beliefs and assumptions and on information currently available to the company's management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including those described in the company's filings with the U.S. Securities and Exchange Commission. No assurance can be given that such future results will be achieved. Such forward-looking statements contained in this press release speak only as of its date. We expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this press release to reflect any change in the company's expectations or any change in events, conditions, or circumstances on which such statements are based, unless required to do so by applicable law. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements.
SOPHiA GENETICS SA
Interim Condensed Consolidated Statements of Loss
(Amounts in USD thousands, except per share data)
(Unaudited)
Three months ended Six months ended June
June 30, 30,
----------------------------
2026 2025 2026 2025
------------- ------------- ------------- -------------
Revenue $ 23,310 $ 18,323 $ 44,998 $ 36,102
Cost of revenue (8,249) (6,053) (15,188) (11,624)
------------- ------------- ------------- -------------
Gross profit 15,061 12,270 29,810 24,478
------------- ------------- ------------- -------------
Research and
development
costs (8,731) (8,493) (18,191) (17,611)
Selling and
marketing
costs (11,186) (10,034) (19,999) (17,568)
General and
administrative
costs (15,202) (12,301) (28,961) (23,901)
Other operating
income, net 5 66 5 74
------------- ------------- ------------- -------------
Operating loss (20,053) (18,492) (37,336) (34,528)
------------- ------------- ------------- -------------
Interest income 231 419 520 869
Interest expense (1,620) (559) (3,287) (1,218)
Fair value
adjustments on
warrant
obligations (317) 58 (409) 20
Foreign exchange
losses, net (519) (3,078) (835) (3,677)
------------- ------------- ------------- -------------
Loss before
income taxes (22,278) (21,652) (41,347) (38,534)
------------- ------------- ------------- -------------
Income tax
expense (78) (762) (331) (1,265)
------------- ------------- ------------- -------------
Loss for the
period (22,356) (22,414) (41,678) (39,799)
------------- ------------- ------------- -------------
Attributable to
the owners of
the parent (22,356) (22,414) (41,678) (39,799)
------------- ------------- ------------- -------------
Basic and
diluted loss
per share $ (0.30) $ (0.33) $ (0.58) $ (0.59)
============= ============= ============= =============
SOPHiA GENETICS SA
Interim Condensed Consolidated Statements of Comprehensive Loss
(Amounts in USD thousands)
(Unaudited)
Three months Six months ended
ended June 30, June 30,
-------------------- ---------------------------
2026 2025 2026 2025
--------- --------- --------- ----------------
Loss for the period $(22,356) $(22,414) $(41,678) $(39,799)
Other
comprehensive
(loss) income:
Items that may
be reclassified
to statement of
loss
Currency
translation
adjustments (81) 9,016 (611) 11,602
--------- --------- --------- ----------------
Total items that
may be
reclassified to
statement of loss (81) 9,016 (611) 11,602
Items that will
not be
reclassified to
statement of
loss (net of
tax)
Remeasurement of
defined benefit
plans 317 46 440 93
--------- --------- --------- ----------------
Total items that
will not be
reclassified to
statement of loss 317 46 440 93
--------- --------- --------- ----------------
Other comprehensive
(loss) income for
the period $ 236 $ 9,062 $ (171) $ 11,695
========= ========= ========= ================
Total comprehensive
loss for the
period $(22,120) $(13,352) $(41,849) $(28,104)
========= ========= ========= ================
Attributable to
owners of the
parent $(22,120) $(13,352) $(41,849) $(28,104)
========= ========= ========= ================
SOPHiA GENETICS SA
Interim Condensed Consolidated Balance Sheets
(Amounts in USD thousands)
(Unaudited)
June 30, 2026 December 31, 2025
----------------------- ------------------------
Assets
Current assets
Cash and cash
equivalents $ 107,665 $ 70,289
Accounts receivable 14,112 15,001
Inventory 7,084 6,351
Prepaids and other
current assets 8,429 7,438
----------------------- ------------------------
Total current assets 137,290 99,079
----------------------- ------------------------
Non-current assets
Property and equipment 4,903 5,665
Intangible assets 36,163 35,891
Right-of-use assets 11,039 12,382
Deferred tax assets 1,769 1,831
Other non-current
assets 7,195 8,183
----------------------- ------------------------
Total non-current
assets 61,069 63,952
----------------------- ------------------------
Total assets $ 198,359 $ 163,031
======================= ========================
Liabilities and equity
Current liabilities
Accounts payable $ 11,904 $ 8,960
Accrued expenses 18,699 20,736
Deferred contract
revenue 15,616 16,720
Lease liabilities,
current portion 2,720 2,700
Warrant obligations 2,144 1,412
Total current
liabilities 51,083 50,528
----------------------- ------------------------
Non-current
liabilities
Borrowings 47,999 47,733
Lease liabilities, net
of current portion 11,108 12,587
Defined benefit
pension liabilities 3,822 4,162
Other non-current
liabilities 1,229 876
----------------------- ------------------------
Total non-current
liabilities 64,158 65,358
----------------------- ------------------------
Total liabilities 115,241 115,886
----------------------- ------------------------
Equity
Share capital 4,814 4,814
Share premium 542,657 473,675
Treasury shares (183) (1,218)
Other reserves 96,784 89,150
Accumulated deficit (560,954) (519,276)
----------------------- ------------------------
Total equity 83,118 47,145
----------------------- ------------------------
Total liabilities and
equity $ 198,359 $ 163,031
======================= ========================
SOPHiA GENETICS SA
Interim Condensed Consolidated Statements of Cash Flows
(Amounts in USD thousands)
(Unaudited)
Six months ended June 30,
--------------------------------------------------
2026 2025
------------------------ ------------------------
Operating activities
Loss before tax $ (41,347) $ (38,534)
Adjustments for
non-monetary items
Depreciation 2,159 1,927
Amortization 3,499 2,740
Finance expense, net 3,354 4,037
Fair value adjustments
on warrant
obligations 409 (20)
Expected credit loss
allowance increase
(reversal) 40 252
Share-based
compensation 7,805 8,191
Movements in
provisions and
pensions 440 304
Research tax credit (441) (528)
Working capital
changes
Decrease (increase) in
accounts receivable 589 (1,298)
Decrease (increase) in
prepaids and other
assets 628 934
Decrease (increase) in
inventory (1,123) 362
Increase (decrease) in
accounts payables,
accrued expenses,
deferred contract
revenue, and other
liabilities 1,227 2,815
------------------------ ------------------------
Cash used in operating
activities (22,761) (18,818)
------------------------ ------------------------
Income tax paid (51) (146)
------------------------ ------------------------
Net cash flows used in
operating activities (22,812) (18,964)
------------------------ ------------------------
Investing activities
Purchase of property
and equipment (1,026) (130)
Acquisition of
intangible assets -- (87)
Capitalized
development costs (4,541) (3,250)
Interest received 520 876
------------------------ ------------------------
Net cash flow used in
investing activities (5,047) (2,591)
------------------------ ------------------------
Financing activities
Proceeds from exercise
of share options 1,233 115
Interest paid (2,715) (1,240)
Proceeds from
borrowings, net of
transaction costs -- 34,563
Proceeds from sale of
common stock in
at-the-market
offering, net of
transaction costs 15,667 --
Proceeds from sale of
common stock in
follow-on offering,
net of transaction
costs 54,048 --
Payments of principal
portion of lease
liabilities (1,201) (889)
------------------------ ------------------------
Net cash flow provided
by/(used in)
financing activities 67,032 32,549
------------------------ ------------------------
Increase (decrease) in
cash and cash
equivalents 39,173 10,994
------------------------ ------------------------
Effect of exchange
differences on cash
balances (1,797) 3,602
Cash and cash
equivalents at
beginning of the
period 70,289 80,226
------------------------ ------------------------
Cash and cash
equivalents at end of
the period $ 107,665 $ 94,822
======================== ========================
SOPHiA GENETICS SA
Reconciliation of IFRS Net Loss to Adjusted EBITDA
(Amounts in USD thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------------- ------------------------
2026 2025 2026 2025
------------ ------------ ----------- -----------
IFRS loss for the
period $ (22,356) $ (22,414) $ (41,678) $ (39,799)
============ ============ =========== ===========
Exclude the impact
of:
Depreciation $ 1,080 $ 942 $ 2,159 $ 1,927
Amortization(3)(4) 1,827 1,428 3,499 2,740
Interest income (231) (419) (520) (869)
Interest expense 1,620 559 3,287 1,218
Fair value
adjustments on
warrant
obligations 317 (58) 409 (20)
Foreign exchange
losses, net 519 3,078 835 3,677
Income tax expense 78 762 331 1,265
Share-based
compensation
expense(1) 4,492 4,356 7,805 8,191
Social charges
related to
share-based
compensation(7) 1,240 (360) 2,308 (5)
Non-cash pension
expense(2) 72 89 163 175
Transaction costs(5) 123 -- 291 --
Litigation
expenses(6) 1,130 -- 1,819 --
Restructuring
costs(8) 1,255 -- 1,255 --
------------ ------------ ----------- -----------
Adjusted EBITDA $ (8,834) $ (12,037) $ (18,037) $ (21,500)
SOPHiA GENETICS SA Reconciliation of IFRS Revenue Growth to Constant
Currency Revenue Growth (Amounts in USD thousands, except for %)
(Unaudited)
Three months ended June 30, Six months ended June 30,
---------------------------- ----------------------------
2026 2025 Growth 2026 2025 Growth
--------- --------- ------ --------- --------- ------
IFRS
revenue $ 23,310 $ 18,323 27 % $ 44,998 $ 36,102 25 %
Current
period
constant
currency
impact (454) -- (1,936) --
--------- --------- ------ --------- --------- ------
Constant
currency
revenue $ 22,856 $ 18,323 25 % $ 43,062 $ 36,102 19 %
SOPHiA GENETICS SA
Reconciliation of IFRS to Adjusted Gross Profit and Gross Profit Margin
(Amounts in USD thousands, except percentages)
(Unaudited)
Three months Six months
ended June 30, ended June 30,
---------------------------------------- ----------------------------------------
2026 2025 2026 2025
------------------- ------------------- ------------------- -------------------
Revenue $ 23,310 $ 18,323 $ 44,998 $ 36,102
Cost of
revenue (8,249) (6,053) (15,188) (11,624)
------------------- ------------------- ------------------- -------------------
Gross profit $ 15,061 $ 12,270 $ 29,810 $ 24,478
Amortization
of
capitalized
research and
development
expenses(3) 1,757 1,357 3,359 2,598
------------------- ------------------- ------------------- -------------------
Adjusted gross
profit $ 16,818 $ 13,627 $ 33,169 $ 27,076
=================== =================== =================== ===================
Gross profit
margin 64.6 % 67.0 % 66.2 % 67.8 %
Amortization
of
capitalized
research and
development
expenses(3) 7.5 % 7.4 % 7.5 % 7.2 %
Adjusted gross
profit margin 72.1 % 74.4 % 73.7 % 75.0 %
Notes to the Reconciliation of IFRS to Adjusted Financial Measures Tables
(1) Share-based compensation expense represents the cost of equity awards
issued to our directors, officers, and employees. The fair value of
awards is computed at the time the award is granted and is recognized
over the vesting period of the award by a charge to the income statement
and a corresponding increase in other reserves within equity. These
expenses do not have a cash impact but remain a recurring expense for our
business and represent an important part of our overall compensation
strategy.
(2) Non-cash pension expense consists of the amount recognized in excess of
actual contributions made to our defined pension plans to match actuarial
expenses calculated for IFRS purposes. The difference represents a
non-cash expense but remains a recurring expense for our business as we
continue to make contributions to our plans for the foreseeable future.
(3) Amortization of capitalized research and development expenses consists of
software development costs amortized using the straight-line method over
an estimated life of five years. These expenses do not have a cash impact
but remain a recurring expense generated over the course of our research
and development initiatives.
(4) Amortization of intangible assets consists of costs related to intangible
assets amortized over the course of their useful lives. These expenses do
not have a cash impact, but we could continue to generate such expenses
through future capital investments.
(5) Transaction costs consists of expenses incurred in connection with the
Company's shelf registration statement and the ATM program.
(6) Litigation expenses consists of expenses related to the company's defense
of lawsuits filed by Guardant Health.
(7) Social charges related to share-based compensation consist of payroll
taxes and other social charges on share-based compensation awards. These
expenses have been, and will continue to be for the foreseeable future, a
recurring expense in the company's business.
(8) Restructuring costs consists of compensation paid to employees during
their garden leave period, severance, and any other amounts legally owed
to the employees resulting from their termination as part of a planned
workforce reduction. Additionally, it includes legal fees incurred as
part of the restructuring process.
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