Q2 2022 Sophia Genetics SA Earnings Call

Good day and welcome to the Sophia Genetics second fiscal 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.

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Please note this event is being recorded. I would now like to turn the conference over to Jennifer Potich, Head of Investor Relations. Please go ahead.

Welcome to Sophia Genetics' second fiscal 2022 earnings conference call. My name is Jennifer Potich and I'm the Head of Investor Relations at Sophia Genetics.

Joining me today are Dr. Jurgi Kamlong, our co-founder and chief executive officer, and Ross Muecken, our chief financial officer.

Before we get started, I would like to remind you that management will make statements during the 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 6K filed today with the SEC.

Except as required by law, Sophia 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, August 9, 2022.

Please note that the replay of this call as well as the earnings release and associated slides will be available on our website in the investor section. And now I'll turn the call over to Yargi.

Thank you, Jen, and hello everyone. I am pleased to be here with you today to share the progress of yet another solid SOFIA quarter with healthy demand across our core platform offerings and key geographies, as well as steady momentum in our major initiatives underlying our strategic pillars.

Despite the challenging macroeconomic environment, our success as a company continues to be driven by the forward-thinking healthcare institutions and licensed leaders that are consistently choosing Sophia as their trusted cognitive analytics platform.

But before diving in, I would like to take this moment to thank all the dedicated Sophians whose efforts fuel our success each and every day. I'm proud to lead this talented team in our ambitious journey to democratize data-driven medicine and build a global network of collective intelligence for healthcare.

On today's call, the narrative for the second quarter will revolve around an overarching theme.

the narrative for the second quarter will revolve around an overarching theme, sustainability.

Our core focus today will be on sustainability and highlighting some of the investments and actions we have already made that will keep Sofia on its path of consistent and attractive long-term growth, as well as placing us on a clear path toward profitability and cash flow generation.

We have been primarily focused on building our core capabilities and infrastructure to drive outside growth momentum and realize our feasible total addressable market.

Now that we believe we have created the solid foundation to build upon, our plan is to transition into a more sustainable investment model as we have always intended.

I am happy to share that many of the crucial capital investments needed to scale our business and support our growth plan over the medium term are being well underway.

Given this dynamic, we would expect operating leverage to become increasingly apparent in the upcoming period and the law for an extended cash runway through 2025 and beyond.

I am so proud of the many achievements we have made over the past years. We built a broad network of customers globally through a strong product portfolio. We computed the tremendous amount of data, which can be leveraged by both our clinical and bio-forma customers to create meaningful insights.

And on top of that, we're also preparing for the deployment of Kerpath this year, a new model of our platform that will bring to life our aspirations of providing multimodal longitudinal data to our core customers to support their diagnostic and treatment decisions.

The seeds of our long-term success have already been planted and now is the time for us to begin harvesting the fruits of these efforts.

Now let's get into the Q2 highlights.

Starting off with new customer adoption and the expansion of the Sophia network.

We are hyper-focused on building long-lasting relationships with new customers to increase and diversify the platform's network.

Customer growth on a global scale proved to be resilient this quarter despite macroeconomic and geopolitical challenges, which have primarily impacted us on a reported basis due to the unfavorable FXZ winds generating.

While global growth is a priority altogether, we remain concentrated on North America, our largest potential market, where we continue to advance our strategy and see positive development.

To that end, on top of continuing to penetrate leading academic centers, we are also making solid progress with penetrating the centralized lab space in North America.

We look forward to sharing more details on our momentum very soon with respect to this effort.

Consumption trends across the board were steady in Q2.

So Pia says strategy revolves around ensuring that new and existing customers recognize the full range of use cases of our platform to broaden and deepen customer relationships.

You may have heard us talk about Sofia's traditional land and expand model on previous earnings calls.

Both application consumption continues to be key to deriving ritual benefits between us and our customers, expanding key customer wings into transformative long-term business relationships.

Total recurring platform customers grew to 388 in the second quarter of this year, up from 367 customers in the second quarter of 2021.

The total number of platform analyses increased to approximately 66,000 in the second quarter, up from approximately 63,000 analyses in the second quarter of 2021.

Year over year, our core platform analysis volume, excluding COVID-related analysis, grew approximately 17%.

while total analysis volume grew approximately 5%.

Overall, global usage has generally tracked according to expectations.

with the exception of Turkey where we saw a notable decline in the period due to the impact of the Lira's continued depreciation and its implication for reimbursement rates.

In another P2I light, we recently finalized an additional agreement with GELSTER to further integrate data between GE's Edison platform and the Sofia BDM platform.

We are thrilled to be taking these steps with them to deepen our partnership and enable our shared customer base to interpret complex data and generate novel insights.

Additionally, this past June at ASCO, Sophia and G. L. Scare presented together in a joint symposium about the respective efforts to unlock the promise of data-driven medicine in cancer through the use of multimodal data. Our Chief Medical Officer, Dr. Philippe Neneu, presented the preliminary findings for Deep Lung 4, the observational clinical study that we launched to validate predictive signatures of response to immunotherapy for patients with advanced non-small-time lung cancer.

At TSCO, we relieved that we showed an initial 80% predictive value for such responses, which is incredibly exciting.

ASCO itself was a big success for us as it resulted in numerous meaningful conversations with customers.

especially the biopharma community who recognize the value not only in the rich volume of data we have computed on our platform, but also for the value of our algorithms, which can help improve the insights and quality of their own data.

Additionally, with respect to D-Plan4, the insights generated from the study are also expected to accelerate the development of and enhance the capabilities of Kerpath.

which is still on track to be deployed later this year.

PerPAS will offer advanced data visualization, courting, and ultimately predictive capabilities to a single comprehensive lens throughout the patient journey.

We anticipate that this module will complement our BioPharma business by helping Lifesense customers select the right patients for the clinical trials and offer them robust patient analytics as well as insights

throughout the course of their trial.

We are encouraged by recent discussions and it is clear that our value proposition to bio-format companies continues to grow with the expanding scale of our multi-modal data and platform capabilities and continuously improving predictive algorithms.

Overall, Q2 was a successful quarter as we continue to execute on our core business while building the foundation for our future.

We are optimistic for the second half of the year and our focus remains on our long-term growth and accelerating our trends to sustainably build the Sophia of tomorrow.

And with that, I will now hand the call over to Ross to take you through our financial and operating results in more detail.

Thank you, Jurgi, and good morning, everyone.

We delivered healthy results for the second quarter of 2022 and are reiterating our full-year outlook for constant currency revenue growth of 30-35%.

Second quarter revenue grew approximately 15% year over year to $11.7 million from $10.2 million in 2021, despite significant headwinds on FX, which negatively impacted our growth by approximately 1,500 basis points due to a material depreciation of the Euro, Swiss Franc and Turkish lira against the US dollar in the period.

Excluding the impact from COVID-related revenues,

constant currency revenue was approximately 36% for the period.

Our net dollar retention rate remains above 120% as of Q2 2022. The slight decline in NDR is particularly attributable to the aforementioned FX headwinds, a slightly higher annualized revenue churn of 7%, which is considered standard in the software space, and a decline in COVID-related revenues as our customers began reducing the scale of their COVID-related operations.

Platform analysis volumes increased to approximately 66,000 analyses in the second quarter of 2022 compared to approximately 63,000 analyses in the second quarter of 2021. Analysis volumes grew approximately 5%, reflecting lower contribution from COVID-related products as well as challenges in our Turkish market that Yurki referenced earlier.

Core platform analysis volume, excluding COVID-related analyses, grew a healthy 17% year-over-year.

Average revenue for platform customer increased to approximately $92,000 compared to approximately $84,000 for the prior year period.

Gross profit in the second quarter of 2022 was $7.6 million, an increase of approximately 22% compared to gross profit of $6.2 million in the second quarter of 2021.

Gross margin was 65% in the second quarter of 2022 compared to 61% for the second quarter of 2021. Adjusted gross margin was notably strong at 67% for the second quarter of 2022 compared to 62% in the prior year period.

Total operating expenses for the second quarter of 2022 were $31.7 million, compared to $22.2 million in the second quarter of 2021 on an IFRS basis.

R&D expenses for the second quarter of 2022 were $9 million.

an increase from $6.4 million in the second quarter of 2021, which underscores our continued investment in technology and product development.

Particularly as we prepare for the initial deployment of CarePath later this year and increase in share based compensation.

Sales and marketing expenses for the second quarter were $8.2 million compared to $7.6 million in the second quarter of 2021.

General and administrative expenses for the second quarter were $14.7 million compared to $8.2 million in the second quarter of 2021. Of note, a majority of the increase in expenditure is related to our scale-up as a public company.

public company related expenses, an increase in share based compensation, and the investments we made to achieve CE IBD certification this quarter. As a reminder, the vast majority of our expenses are headcount related, as is typical with any cloud software business.

Operating loss in the second quarter of 2022 was $24.1 million compared to $15.9 million in the second quarter of 2021. Adjusted operating loss in the second quarter of 2022 was $19.6 million compared to $14.3 million in the second quarter of 2021.

Net loss in the second quarter was $24.7 million, or $0.39 per share, compared to $18.4 million, or $0.38 per share in the second quarter of 2021. Adjusted net loss in the second quarter of 2022 was $20.2 million, or $0.31 a share, compared to $15 million, or $0.31 a share in the second quarter of 2021.

Cash and cash equivalents were approximately $216.6 million as of June 30, 2022. Turning to guidance. speech, advice, money, donations etc.

We are reiterating our previously presented constant currency revenue growth range of 30 to 35 percent for the full year 2022. Demand trends overall remain healthy.

Given our high level of visibility, we do not expect a material shift in our underlying fundamentals in the second half.

Despite our continued confidence in our core business, FX headwinds have worsened materially since our original guide. And in turn, our reported range for the full year 2022 revenue now translates to be between $47 million and $49.5 million.

Of note, this range is based on June 30 FX rates.

Furthermore, following Zyrgi's theme of sustainability, I also want to reiterate that we are committed to our shareholders to be diligent with respect to organic and inorganic growth objectives and investments. We have put in place numerous initiatives to enhance productivity and efficiency to maximize our capital runway with an eye towards long-term profitability. With that being said, we recently conducted a comprehensive review of our cost structure.

and are implementing optimization strategies, in particular with regards to our research and development efforts, as well as our corporate spend, with the aim of extending our cash runway and bridging toward profitability and cash flow breakeven.

I am pleased to share that based on our conclusions from our updated planning exercise, we currently envision sufficient capital on hand over the next several years, placing us on the pathway to profitability and cash flow generation and in turn self-sustainability. Our efforts will remain focused on balancing the cadence of investments required to achieve our growth ambitions.

while keeping a focused eye on driving superior returns. Fortunately, as Jurgi mentioned earlier, many of the upfront investments we have made in 2022 should aid in our ability to meet this dual mandate.

Thank you for your time this morning. I am looking forward to seeing so many of you in New York at Sophia's Investor Day next month. And now I will turn the call back over to Jurgen.

Thank you Ross.

As we look to the second half of our fiscal year, we are on solid footing.

Despite some of the current macro challenges, we believe that the broad and unique capabilities of our platform, which we continue to augment with new product launches, will continue to drive global customer adoption and increase usage from our customers' base.

We remain optimistic about Sofia's journey and our continued leadership in using the power of data analytics and predictive AI to transform the world of healthcare.

While we have accomplished a tremendous amount already, we are just getting started.

Before I open the call to questions, I want to remind everyone that Sophia's investor day is taking place on September 20th in New York City. We hope to see you there!

Thank you again for joining our call today and operator, we will now take questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchstone phone.

If you are using a speakerphone, please pick up your handset before pressing the keys.

If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

And our first question will come from Teja Savant with Morgan Stanley . Please go ahead....

Hi, this is Neil on for Tejas. Last quarter you talked about the strong visibility into the pipeline for net new business wins through the second half of the year. And based on the progression you're seeing with HRD along with other major partners such as AstraZeneca and Ambry, can you break out some of the puts and takes here on the guidance range and how we should think about revenue phasing through the second half, factoring in the increased FX impact?

Thank you for the question. I will take your question regarding the bookings and then I will let Ross comment on any impact you could or not expect on the revenue side. On the bookings side, we've seen the bookings healthy and stable, I would say, over the last quarter. We definitely see more and more demand on applications like the HRD, which becomes more and more important in terms of signature.

the overall oncology share. And in particular, we start seeing such type of demand in the US by the central app. So we have good hope that indeed this should enable us as well to gross revenue in the mid long term. Ross, I don't know if you want to further develop on the revenue side.

Thank you. So, obviously, with respect to the guidance, the material change that we had this quarter was really around FX, right? So, that continues to be the biggest swing factor related to reported revenues. If you think about it from an organic or core perspective, I would say we've modeled utilization relatively conservatively for the back half of the year, and so no real expected change in the underlying.

I would say demand curve that we had predicted in the first part of the year, albeit I would remind you seasonally Q4 is typically our strongest quarter. To your point on the phasing, just given the time it takes to set up HRD clients, which is typical for any new start, that was going to push some of the revenue to the back part of the year. We continue to expect that to be the case. I would say, we continue to expect that to be the case.

from a recognition perspective, we probably have a bit more variability around our biopharma business than we do HRD as possible. We see a quicker uptake of HRD related revenue relative to the model, but I would say ultimately pharma is probably where we have the bigger swing point just because of the size of those contracts. And so we have a number of things projected for the back end of the year that we're...

I would say quite confident on recognizing and we have a few other elements that could lead us to some degree of upside. And then one last one, and I'm sure we'll get to in another piece. We've also, I would say, from your model, Turkey relatively conservatively for the rest of the year. And so we've tried to take that into consideration as that piece of our business, as maybe your people will talk to later, was a big challenge in the quarter.

Got it, thank you. And considering the macro-volatility and some of the erosion you're seeing in FX, are you starting to see any signs of shifting customer demand or signals of tightening budgets, particularly in regions such as Europe ? And given the value proposition presented by your platform to enable lower-cost bioinformatics, can you give us some colour on how those customer conversations are progressing?

Thank you for the question, Tejaz.

So overall, if we look at our usage, which as you know, it's a proxy of our revenue, given we're a consumption-based as a cloud player. So EMEA is being stable this quarter, while Turkey has been down materially because of the impact that Ross was telling about FX, which impacted basically reimbursement in Turkey and then less consumption. From that one, as Ross said, we've been presenting our forward-looking forecast, but we expect EMEA to be stable.

And in Noram, APAC and LATAM, we continue with stronger growth. And we don't see any sign for this being decelerated. And to your point, I think, given now maybe the markets expect some private leaders as well to be more cautious on cost, it might be that this gives us a favor in the adoption of our platform because we believe that with our platform solution, we cannot only accelerate adoption of.

precision medicine application into the hospitals and into the central labs, but indeed we can make it as well in a very cost-effective way.

I would add one point to that. Obviously the other advantage of the consumption model is obviously no capex, no significant upfront investments. We can really allow players to adopt our technology in a pretty capital efficient way. Then as they scale up and obviously receive revenue for what they are doing, they can increasingly consume. Of course, it's going to be the volume of forte responsibly occurring similarly to other pools of sensorsrooms. Theissive, our

We'll obviously watch the market closely, but as of now, things are, I would say, quite healthy and steady in our core markets, and we've seen no signs relative to what you highlighted on the macro, with the exception of Turkey.

Great, and one last for me. You know, there are a few peers this quarter in the diagnostic space pointing to some impacts presented by hospital staffing and labor shortages. While your business is quite geographically dispersed, have you seen any of those impacts in 2Q, temporary, or ongoing to the business?

So nothing so far to judge and maybe as a recap, right, our clients are primarily core academic centers, right, so the ones that are basically treating people who are suffering from severe diseases such as cancer. And so as we have seen in the past as well, right, with COVID, those hospitals have been very good at equipping themselves so that they could sustain their efforts and serve their patients.

And so in a certain sense, maybe this position in this core academic centers is not impacting us while as you describe, maybe others have been impacted while they are serving more of the community hospital.

Great, thank you.

Thank you to Jeff.

Our next question will come from Julia Quinn with JP Morgan. Please go ahead. We are now looking at three different pieces from your advisory board.

Hi, good morning. Thanks for taking a question. Starting with the cash runway, you said you expect the cash runway to extend to at least 2025. I'm wondering, you know, between Gross March, Gen, Sales Marketing, R&D, etc., where do you see the greatest leverage? And for R&D, just wondering, you know, what areas are you prioritizing versus deprioritizing and how do you see that?

potentially impacting any new product launches or any expansion going forward. Thank you, Julia. I will start and let Ross afterwards develop on the gross margin side. On the core investments, as we have mentioned, we have already made important investments over the years, actually over 10 years, in our core platform capabilities. And these capabilities enable us to deploy quite quickly new applications such as HRD.

And even on the application side, I think we've made big efforts over the last two years so that we could really get great momentum now in the years to come. So we don't necessarily have any need, if you like, to invest deeply in terms of R&D capabilities to further strengthen our current technology and algorithmic capabilities.

So indeed in that sense you should expect that our investments will be pretty flat and then I will let Ross give you some cover on the GMA and other sales and marketing aspects.

Thanks, you're so obviously we make pretty good progress this quarter on the gross margin side. And continue to remain very focused there, albeit again, depending on mix and a number of other items that could bump around a bit quarter to quarter. But overall, the trend has been favorable and again, long term, we're aiming. Uh, for software like margins in this business, so that will help. But I think. You know, relative to the operating expenses, you know, you're getting talked about some of the.

You know, key projects that we've already put significant investments toward and so we'll get operating leverage as those projects start to generate revenue, like care path and where we're seeing HRD and. Our bio pharma efforts, I would also say we're very focused on the line. Obviously, public company costs are not insignificant and so they are we've made some real efforts to continue to bring down that sort of spending level and I would expect you to see that over the next several.

portfolio. But again, I think in any given period you could see a bit more leverage from one of those lines versus the other sort of dependent on some of the underlying movements and just the cycling of projects and investments.

And maybe to last on the G&A, we had, as you may remember, we had invested, say, for us quite significantly on the quality regulatory aspect over the last year. And this was a strategic decision, right? And it's one where we had to recruit an experienced team so that we could set the standards in our industry with the platform being now IVDD with plans to go to IVDR and potentially to have the approval path.

but as well entertain and develop our conversations with the biopharma industry. And so in that sense, like this investment was strategic as well. We have the headcount we need now in our plan. And so you shouldn't expect further expansion of this team in the future.

Great. Super helpful. And then in terms of CarePath, I was just wondering if you could give us a little bit more color on what feedback has been within the biopharma community on your DPLON initial readout at ASCO and how your current biopharma pipeline is trending. And for CarePath, what do you think will be the monetization model? Is this still a paper analysis basis, or are there other, you know, clinical trial enrollment or CDX-DIO components to it? And how should we think about the revenue ramp?

being for me beyond my expectations. And not only we have been able to demonstrate the value of the data we collect as we are serving a decentralized clinical market, including with CarePass for the DeepLung for a Study and the value of this data for the pharma. But as well, and I would say this was almost a positive surprise, although we were expecting that, but was a realization. We confirmed as well that our technology, so our algorithm.

are being perceived to kind of being unique to compute as well the data that the pharma themselves are being producing and where they may want to have our algorithms revisit their data to see if we can identify anything that they wouldn't have seen so far. So very excited and very positive. We will have soon an announcement as well regarding a deep lung study where we're extending the number of sites that are basically joining the effort and we have already

computed the data of about 500 patients with an accuracy of 80% on being able to basically have an idea whether a patient will respond or not respond to the immunotherapy. So this could be an important step forward, I would say, for Sophia, but for overall the industry when it comes to leveraging on multimodal data and better transitions around the world.

That's great. Last one from me. Congrats on the recent CE IVD approval. Can you maybe talk a little bit about the significance and how much incremental revenue opportunity that unlocks? And in terms of volume mix, do you expect any changes compared to existing customers with the CE IVD approval and any implications in terms of ASP?

Thank you, Julia. So on the run-view side, I cannot share with you any information, but I will explain you the rationale and the importance indeed of this IVD effort, and thank you for highlighting that. There are big changes in the regulation, if like in Europe , where people are expected to move to a new framework, which is called IVDR, and given these IVDR centers are pretty high, the first path is going towards IVDD.

and there was a strong deadline for all the players and Sofia has been able indeed to fulfill that deadline this summer on the platform but as well on four core applications for primarily

excuse me, oncology applications.

And what we are now doing is indeed for some of the customers who want to move from RURO to IVDD environments or more regulated environments, we're helping in this transition. And this is a trend we definitively expect to happen across the board. And so I think we're now with the investments we made pretty well positioned to accompany our customers in this more regulated environment.

And maybe just to add, obviously, relative to your ASP question, regulated products you would expect to have a higher ASP. And I think, frankly, as you look at our results this quarter, we've actually continued to see very nice ASP progress this year, but unfortunately, it's been obviously washed away by currency, right? So obviously something to keep in mind, but you would expect to see that trend continue favorably for us.

once currency ceases to be such a significant headwind in the news currently.

Very helpful. Thank you.

Our next question will come from Mark Massaro with BTIG. Please go ahead.

Hey guys, this is Vivian on from us. Thanks for taking the question. And I think you've previously spoken about pursuing additional data modalities such as visual pathology proteomics, any sense of timing or prioritization on these, and maybe how are you sensing customer demand on these fronts from existing customers?

Thank you for the question, Vivien. So I would say right now we are really focused on our core capabilities, right? So which are basically genomics, radiomics, and combining genomics and radiomics data modalities longitudinally in the Kerpat. As I was mentioning while responding to Julia, this got really a lot of, say, we had a lot of discussions at ASCO around this capability.

In that sense, today our focus, I think, is very disciplined.

positively as well the evolution of some new players in the sequencing sector and as you realize that now they will be maybe broader sequencers and with that we expect if you like volumes to go up but as well the value informatics will go up right so say despite indeed as we have said in the in the past as well we do see a potential for tech players gathering multi-modal data to the pathology and potential mix

Right now what we see in the industry is more or neither around the core genomics capabilities that are increasing as well as multi-modal capabilities mixing up radiogenomics data.

Perfect. Thanks so much. Maybe just one quick follow-up. From the gross margin improvement, could you just remind us of any targets you have there longer term? Thanks.

Ross, can you take this one?

Sure, so obviously, as I said earlier, we're striving for software-like margins in the business. And if you look at data companies across the traditional tech space, obviously you will see numbers sort of at our level to slightly higher. I would say in the medium term, and we'll probably cover more of this at the analyst day, we've talked about sort of the 70% threshold as sort of a target.

Obviously this quarter at 67 where we're making progress toward that albeit I would say Again, we don't expect you know it to be a perfect linear trend and so ultimately You know the mix of our business will also determine that Somewhat as you know bio pharma other elements have quite high margins for us as they're traditionally data businesses But overall we're very we're very happy with the progress there and again You know we're continually

focused on ways to drive leverage in this business. Great, thanks so much for taking the question.

Thank you, Liam.

Again, if you have a question, please press star then one. Our next question will come from Dan Brennan with Cowan. Please go ahead.

Hey, good morning. This is Kylan for GAN. I just want to talk about your traction in the US. You've been pretty positive about the large opportunity in increasing traction here. Could you just discuss your traction with large US reference labs and maybe help us think through the future impact on revenue and margins?

Yes, thank you, Kaelin. Good morning. So as mentioned, right, the traction has been solid in Hapac, Latam, and in Noram, and stable in EMEA. Noram indeed was a market where there were questions regarding our model, which is more decentralized. But every day we execute upon our model, and it's a region where we are nicely growing. And the HRD capabilities we built enabled us to grow beyond, I would say, the traditional...

Around these these customers and we think the momentum continues to build and so I don't stay tuned On that front is hopefully we will have more to share at a later date

Great, and then maybe just one clarifying the growth guidance here in constant currency terms. So the 30 to 35% constant currency growth, does that include or exclude the impact of COVID? And then on that note, how should we really think about the COVID impact for the rest of the year? Well, as always, shout out our 2F7

So first as a reminder, Kyle, so year on year on the core business, putting the effects impact aside and the COVID we grew 36% year on year, so which was a solid performance. And then with COVID we were, without COVID or with the COVID going down right, we were around 30% and 17% with effects. So the business has been solid and highly impacted, I would say in terms of reporting currency but not to the constant currency.

to almost no contribution by the end of the year, and that's still reflected, right? So again, we've trended so far year-to-date at the upper end of that range or slightly above, and so we're happy with sort of the underlying performance, and we've talked about, again, a number of factors that should help us in the back half of the year, particularly in Q4. And so, as you think about the range updated, it was purely FX-related, which obviously has been quite painful for us.

across the board with with a number of the core currencies and so again that 30 to 35 captures some of the negative COVID mix And and also it's consistent with what we said prior.

Awesome, thanks for taking my questions.

Thank you, Kyle. This concludes our question and answer session. I would like to turn the conference back over to Jurgi Khemblang for any closing remarks.

Thank you again all for joining the call today. As we are getting closer to our investor day in New York in September , we're very much looking forward to see some of you there. Have a good day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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