SOPHiA GENETICS Q3 2026 Earnings: Revenue Grows 25% as Adjusted EBITDA Loss Narrows

SOPHiA GENETICS (Nasdaq: SOPH) reported Q3 2026 revenue of $24.3 million, up 25% from $19.5 million a year earlier, while basic and diluted loss per share narrowed to $0.24 from $0.30. For the quarter ended September 30, record analysis volume, U.S. growth, and BioPharma activity supported revenue, while adjusted EBITDA loss improved 31% even as the IFRS net loss edged up 1% to $20.3 million.

Core Financial Results

Constant-currency revenue was $24.4 million, up 26%, close to the reported growth rate. Gross profit increased by about 23%, but both IFRS and adjusted gross margins declined modestly.

Operating loss was nearly unchanged because the increase in gross profit was absorbed by higher operating expenses. The difference between the narrower per-share loss and slightly wider net loss also reflects a higher share count.

Adjusted gross margin and adjusted EBITDA are non-IFRS measures. Adjusted gross profit excludes amortization of capitalized research and development expenses, while adjusted EBITDA excludes several cash and non-cash items.

Business and Geographic Performance

SOPHiA DDM completed a record 118,000 analyses, 19% more than a year earlier. Net dollar retention increased to 118% from 108%, while the number of core genomics customers reached 551, up from 488. The company signed 30 new core genomics customers during the quarter, with revenue contributions expected to begin over the following 12 months.

Geographic growth was led by North America, where revenue increased 45%, and Asia-Pacific, where it rose 33%. U.S. revenue grew 41%, supported by new accounts and customer expansions. A newly signed expansion with a U.S. military medical center was valued at more than $2 million annually, although the company did not quantify its Q3 contribution.

Liquid Biopsy volume more than doubled to 4,200 analyses as additional customers implemented the application. BioPharma activity also expanded through three material agreements, including two AstraZeneca companion diagnostic programs and a multimodal AI collaboration focused on bladder cancer treatment selection.

Adjusted EBITDA Improved, but IFRS Loss and Cash Burn Persisted

The $3.0 million increase in quarterly gross profit did not materially reduce the IFRS operating loss. Research and development costs rose to $8.3 million from $8.1 million, selling and marketing costs increased to $10.6 million from $8.7 million, and general and administrative costs reached $14.9 million from $13.9 million. Together, those three expense lines increased by about $3.1 million.

Part of the divergence between adjusted EBITDA and IFRS net loss reflected higher costs excluded from adjusted EBITDA. These included $4.6 million of share-based compensation, $2.8 million of related social charges, $0.9 million of litigation expenses, and $0.5 million of restructuring costs. The fair-value adjustment on warrant obligations also increased to $1.1 million from $0.6 million. The adjusted improvement therefore needs to be considered alongside the nearly unchanged operating loss and slightly wider net loss.

For the first nine months of 2026, net cash used in operating activities increased to $32.3 million from $27.8 million. Investing activities used another $6.9 million, including $7.1 million of capitalized development costs. Cash and cash equivalents nevertheless rose to $93.7 million from $70.3 million at the end of 2025, supported by $65.0 million of net financing inflows, including $69.1 million from at-the-market and follow-on stock offerings.

Financial Outlook

SOPHiA GENETICS now expects full-year revenue to finish at the upper end of its existing range. The adjusted EBITDA loss outlook implies a material improvement from 2025, although the company remains loss-making on this measure.

Management said business performance supported the revenue outlook, but foreign-exchange rates at the end of Q3 could become a Q4 revenue headwind if sustained. The company also reaffirmed its objective of reaching positive adjusted EBITDA in the second half of 2027.

Recent Insider Transactions

Over the reported six-month period, insiders purchased 238,620 shares in 11 transactions and sold 636,001 shares in 68 transactions, resulting in net sales of 397,381 shares. Total insider holdings were reported at approximately 6.16 million shares, and the latest 10 disclosed transactions were all direct sales with a combined reported value of approximately $408,922.

The disclosed sales establish the transaction history but do not, by themselves, indicate insiders’ expectations for the company.

Risks Investors Need to Watch

• Ongoing losses: SOPHiA GENETICS continued to report substantial IFRS operating and net losses, while its target for positive adjusted EBITDA remains in the second half of 2027.
• Cash consumption and external financing: Nine-month operating cash use increased, and the higher cash balance was supported by equity offerings. Continued cash burn could create a need for additional financing.
• Costs excluded from adjusted EBITDA: Share-based compensation, related social charges, litigation, restructuring, and amortization remain relevant expenses even though they are excluded from the adjusted measure. Guardant Health litigation expenses are expected to continue and could increase.
• Foreign-exchange exposure: The company identified exchange rates as a potential Q4 revenue headwind, which could affect whether full-year revenue reaches the upper end of guidance.
• Customer ramp timing: The 30 newly signed genomics customers and several U.S. accounts are expected to contribute over the next 12 months or in 2027, making implementation and usage growth important to future revenue conversion.

Summary

SOPHiA GENETICS delivered 25% revenue growth through higher analysis volume, customer expansion, U.S. momentum, and BioPharma partnerships. Adjusted EBITDA moved closer to break-even, but IFRS losses remained substantial and operating cash use increased. The main items to monitor are conversion of recently signed customers into revenue, gross-margin trends, foreign-exchange effects, cash consumption, and progress toward the company’s 2027 adjusted profitability objective.