Q1 2024 SOPHiA GENETICS SA Earnings Call

Good day, everyone. My name is Jamie and I'll be your conference operator today.

Jamie: Good day, everyone. My name is Jamie, and I'll be your conference operator. At this time, I'd like to welcome everyone to the Sophia Genetics first quarter 2024 earnings conference call. At this time, all participants will be in a listen-only mode.

Jamie: At this time I'd like to welcome everyone to the Sofia Genetics first quarter 2024 earnings conference call.

Jamie: At this time, all participants will be in a listen only mode should you need assistance. Please you know a conference specialist by pressing the star key followed by zero.

Jamie: Should you need assistance, please say no to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star and one on your touchtone telephone.

Jamie: After todays presentation, there will be an opportunity to ask questions.

Jamie: To ask a question you May press star one on your Touchtone telephone.

Jamie: For all your questions, you may press stars and two. Just a note, today's event is being recorded. At this time, I'd like to turn the floor over to Kellen Stanger, Sophia Genetics' Head of Strategy and Investor Relations. You may begin. Thank you, and good morning, everyone.

Draw your questions you May press star two.

Jamie: Also note todays event is being recorded.

Jamie: At this time I'd like to turn the floor over to Colin Sanger, Cepheid genetics head of strategy and Investor Relations.

Colin Sanger: You may begin.

Colin Sanger: Thank you and good morning, everyone welcome to the Sofia Genetics first quarter 2024 earnings conference call.

Kellen Stanger: Welcome to the Sophia Genetics first quarter 2024 earnings conference call. Joining me today to discuss the results are Dr. Jurgi Camblong, our co-founder and chief executive officer, and Ross Muken, our chief financial officer and chief operating officer. I'd like to remind you that management will make statements during this call that are forward-looking statements within the meetings of federal security. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on such forward-looking statements.

Colin Sanger: Turning me today to discuss our results our Doctor year D. Campbell, our co founder and Chief Executive Officer, Andrew <unk>, Our Chief Financial Officer, and Chief operating Officer.

Colin Sanger: I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal securities laws.

Colin Sanger: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated and you should not place undue reliance on forward looking statements.

Kellen Stanger: Additional information regarding risks, uncertainties, and factors that could cause results to differ is included in the press release Sophia Genetics issued today and in the documents and reports filed by Sophia Genetics from time to time with the Securities and Exchange Commission. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of IFRS and non-IFRS measures is included in today's earnings press release, which is available on our website. With that, I'll now turn the call over to Jurgi.

Colin Sanger: Additional information regarding risks uncertainties and factors that could cause results to differ appears in the press release Sofia genetics issued today and in the documents and reports filed by Sofia genetics from time to time with the Securities and Exchange Commission.

Colin Sanger: During this call we will present, both <unk> and non <unk> financial measures.

Colin Sanger: A reconciliation of <unk> non <unk> measures is included in today's earnings press release, which is available on our website with that I'll now turn the call over to Europe.

Europe: Thanks, Kevin and good morning, everyone.

Jurgi Camblong: Thanks, Kellan, and good morning, everyone. I will start off the call today by providing an update on our progress in Q1, including detail on the performance of our clinical and biopharma business. I will then turn the call over to Ross, who will provide a closer look at our Q1 financials and our outlook for 2025. In Q1, the performance of the business was marked by strong forward-looking indicators, such as bookings and new logos, but lighter than expected revenue.

Europe: We'll start off the call today by providing an update on our progress in Q1, including detail on the performance of our clinical and Biopharma businesses.

Europe: I will then turn the call over to Ross, who will provide a closer look at our Q1 financials and our outlook for 2024.

Ross: In Q1 performance of the business was marked by strong forward looking indicators, such as bookings and new logos, but lighter than expected revenue total revenue for the quarter was $15 8 million up 13% from 14 million to alert in Q1, 2023 and analysis volume was approximately 84000.

Jurgi Camblong: Total revenue for the quarter was $15.8 million, up 13% from $14 million in Q1 2023, and analysis volume was approximately $84,000, up 9% from the prior year period. The lighter than expected start for the year can be attributed to three primary drivers.

Ross: Up 9% from the prior year.

Ross: Yes.

Ross: The later than expected start for the year can be attributed to three primary drivers.

Jurgi Camblong: First, as with any consumption-based business, we expect to see volatility from time to time. In this case, we saw slower-than-expected analysis volume in January across nearly all applications, but particularly within Yemye, which can likely be attributed to exaggerated seasonal consumption, Second, and as mentioned during our last earnings call, set-up times for business have been slightly longer than expected as more and more customers adopt new sequencer types and adopt increasingly sophisticated applications, which require them to spend a bit more time on proficiency testing and validation before they can begin implementing our platform.

Ross: As with any consumption based business, we expect to see volatility from time to time.

Ross: In this case, we saw slower than expected analyses volume in January across nearly all applications, but particularly within EMEA, which can likely be attributed to exaggerated seasonal consumption trends.

Ross: Second.

As mentioned during our last earnings call setup times for business have been slightly longer than expected as more and more customers adopt new sequencer types and adopt increasingly sophisticated applications, which require them to spend a bit more time on proficiency testing and validation before they can be.

Ross: Commencing our platform.

Jurgi Camblong: Third, the signing of one of our data projects in biopharma was unexpectedly delayed during the quarter, as we are seeing some elongated sales cycles for larger data. Let me take a moment to address each of these items.

Ross: The signing of one of our data projects and Biopharma was unexpectedly delayed during the quarter as we have seen some elongated sales cycles for larger deals.

Speaker Change: Let me take a moment to address each of these items.

On the first point with respect to usage in January and pleased to report that consumption picks up countries revenue in March and this momentum continues now into April and early May for example volume in March reached approximately 30000 analogy as compared to the approximately 84000 in Eddie V's.

Jurgi Camblong: On the first point, with respect to usage in January, I'm pleased to report that consumption picked up considerably in March, and this momentum continues now into April and early May. For example, volume in March reached approximately 30,000 analyses, as compared to approximately 84,000 analyses for the quarter. As a company that maintains close relationships with customers, conversations from the field further indicate that the change in consumption was temporary. Additionally, many customers also reconfirmed their volume assumptions for the full year and will continue to monitor their usage closely.

Speaker Change: For the quarter.

Speaker Change: As a company that maintains close relationships with customers called recession from the field further indicates that the change in consumption with kimco.

Speaker Change: Additionally, many customers also reconfirmed the volume assumption for the full year and we'll continue to monitor their usage.

Speaker Change: In addition to consumption returning returning to more normalized levels March bookings for new clinical business grew over 30% year over year in the quarter nicely above our internal expectations.

Jurgi Camblong: In addition to consumption returning to more normalized levels in March, bookings for new clinical business grew over 30% year-over-year in the quarter, nicely above our internal expectations. We also signed an impressive 27 new logos in Q1, up from 18 new logos in the prior year period. This marks a second consecutive quarter of strong new business growth. The 27 new logos signed in Q1 join the 35 new logos signed in Q4 2023 to set us nicely for a strong back-to-back run for the year.

Speaker Change: We also signed an impressive 27, new logos in Q1, that's from 18, new logos in the prior year period.

Speaker Change: This marks our second consecutive quarter of strong new business growth.

Speaker Change: The 27, new logos signed in Q1 joined the 35, New logos signed in Q4 2023 to set up nicely for a strong back out ramp for the year.

Speaker Change: On the second point regarding longer than expected setup times, we have now fully ramped up a team of best in class subject matter experts with deep experience in setting up and validating genomic workflows.

Jurgi Camblong: On the second point regarding longer-than-expected setup times, we have now fully ramped up a team of best-in-class subject matter experts with deep experience in setting up and validating genomic workflows. These specialists, who we call our master team, are laser-focused on partnering with customers to help them complete their proficiency testing quicker so that they enter routine usage and begin generating revenue faster. This team is well prepared to manage the exciting influx of new customers. We have experience over the last two quarters.

Speaker Change: This, especially who we call our March 13th our laser focus and partnering with customers to welcome completes their books shouldn't keep testing quicker. So they enter routine use etch and begin generating revenue factor.

Speaker Change: This team is well prepared to manage the existing increase of new customers.

Speaker Change: We have experienced over the last two quarters.

Jurgi Camblong: In Q1, we had 19 new customers and routine usage, up from 14 in the prior year period, and we are excited to see this positive trend continue. On the final point regarding bioforma delays, we have developed an action plan to recover the revenue and capitalize on growing demand for bioforma during the back end of the year. While our biopharma pipeline has more than doubled in the past year, the business is still in its nascent stages, and the timing of biopharma revenue remains difficult to predict. In conclusion, consumption has returned to more normalized levels, and new business remains. We have taken actions to reduce setup times and accelerate new customers into routine usage.

Speaker Change: In Q1, we have 19, new customers going to routine usage.

Speaker Change: <unk> 14 in the prior year period, and we are excited to see this positive trend continue.

Speaker Change: On the final point regarding Biopharma delay, we have developed an action plan to recover the revenue and capitalize on growing demand in biopharma during the back out for the year.

Speaker Change: While our biopharma pipeline as more than doubled in the past year. The business is still in its nascent stages and the timing of Biopharma revenue remains difficult to predict.

Speaker Change: So in conclusion consumption has returned to more normalized levels and new business remains strong.

Speaker Change: We have taken actions to reduce setup time and accelerate new customers into routine usage and last we have a plan in place to make advance from the growing number of Biopharma opportunity, we're seeing in the market.

Jurgi Camblong: And last, we have a plan in place to take advantage of the growing number of biopharma opportunities we are seeing in the market. Given these factors, we remain confident in a strong back health business in 2024 and are reaffirming our revenue guidance for the year. Before moving on to a more robust update on our commercial business, I do want to highlight that we also importantly continue to manage costs well in the quarter, as adjusted operating loss improved 13% year-over-year to $14.1 million, as compared to $16.2 million in Q1 2022. During the quarter, we remain obsessed with capital efficiency by continuing to take actions to optimize our operations and focus on increasingly high ROI projects.

Speaker Change: Given these factors we remain confident in our strong back half ramp in 2024 and are reaffirming our revenue guidance for the year.

Speaker Change: Before moving onto a more robust update on our commercial business I do want to highlight that we also importantly continue to manage cost well in the quarter as adjusted operating loss improved 13% year over year to $14 1 million as compared to 16.

Speaker Change: $8 2 million in Q1 2020.

Speaker Change: During the quarter, we remain obsessed with capital efficiency by continuing to take actions to optimize our aggression and focused on increasingly high ROI projects.

Jurgi Camblong: We also continue to work closely with partners such as Microsoft and NVIDIA to manage gross margins, and our adjusted gross margins remain above 70% during the quarter, despite the temporary softness in clinical volume and biopharma demand. We are proud of our cash management to date and therefore are also reiterating our full year guidance for 2024 with respect to our adjusted gross margins and adjusted operating loss and remain deeply focused on our goal of achieving profitability in the next two plus years with an acceptable level of cash cushion.

Speaker Change: We also continue to work closely with partners, such as Microsoft and <unk> to manage gross margins and our adjusted gross margins remained above 70% during the quarter. Despite the temporary softness in clinical volume and Biopharma demand.

Speaker Change: We are proud of our cash management to date and therefore are also reiterating our full year guidance for 2024 with respect to our adjusted gross margin and adjusted operating loss and remain deeply focused on our goal of achieving profitability in the next two plus years with an acceptable level of cash cushion.

Speaker Change: As we progressed in our path to profitability revenue growth continues to be the primary driver towards these objectives.

Jurgi Camblong: As we progress on our path to profitability, revenue growth continues to be the primary driver towards this objective. At Sophia, we grow our clinical revenue by landing new customers and expanding within those customers over time as they adopt more and more applications. As of March 31st, we had 463 core genomics customers who have used SophiaDDM in the past 12 months to analyze cancers and rare diseases, up sequentially by 13 customers, and up annually by 26 customers.

Speaker Change: Sophia we grow our clinical revenue by landing new customers and expanding within those customers over time as they adopt more and more applications.

Speaker Change: As of March 31st we had 463 core genomics customers, who have used <unk> in the past 12 months to analyze cancers and broad diseases that sequentially by 13 customer and up annually by 26 customers.

Jurgi Camblong: Our focus will continue to expand within these existing accounts by encouraging them to adopt more and more of our applications. Our proven ability to expand within existing customers is demonstrated by our continued high net dollar retention, which was 123% in Q1, up materially from 107% at the end of Q1. Our ability to expand within existing customers also exemplifies the importance of landing new customers.

Speaker Change: Our focus will be continue to expand within these existing accounts by encouraging them to adopt more and more of a hierarchy cash.

Speaker Change: Our proven ability to expand within existing customers as demonstrated by our continued high net dollar retention, which was 123% in Q1, that's materially from 107% at the end of Q1 2023.

Speaker Change: Our ability to expand within existing customers also exemplifies the importance of landing new customers. As mentioned Q1 was a strong quarter in terms of landing new customers with 27, new logos signed for these customers as well as the 35, new customers signed in Q4 hour.

Jurgi Camblong: As mentioned, Q1 was a strong quarter in terms of landing new customers, with 27 new logos signed. For these customers, as well as the 35 new customers signed in Q4, our Mark's Care team will be laser focused on reducing their time to routine so that they begin generating revenue faster. I will now take a moment to provide more detail on some of our major new land and expansion achievements during Q1. And in doing so... We'll also touch upon three primary factors driving our growth in 2020, the U.S. market, our world-class solid tumor applications, and our new liquid biopsy of... First, we continue to see competing momentum in the U.S. market. Analysis Volume in the U.S. grew 34% in Q1 when compared to the prior year period, and revenue grew 27%.

Speaker Change: <unk> team will be laser focused on reducing the return to routine so that they begin generating revenue faster.

Speaker Change: I will now take a moment to provide more detail on some of our major new land and expand achievements during Q1.

Speaker Change: And in doing so well.

Speaker Change: We will also touch upon three primary factors driving our growth in 2020 for the U S market, a world class quality more application and our new liquid biopsy offering.

Speaker Change: First we continued to see competing momentum in the U S market.

Speaker Change: Analysis volume in the U S grew 34% in Q1, when compared to the prior year period and revenue grew 27%. We continue to win major new logos in the U S and today I'm proud to announce the signing of Mayo clinic, one of the top rank academic medical centers in the world with adopting Sofia <unk>.

Jurgi Camblong: We continue to win major new logos in the U.S., and today I'm proud to announce the signing of Mayo Clinic, one of the top-ranked academic medical centers in the world, to adopt Sophia Didyem's capabilities in oncology, starting with EMONC applications. Welcome Mayo Clinic to the Sophia community. Beyond the U.S., we achieved major recent wins in the Asia-Pacific market as well.

Capabilities in oncology, starting with inbound applications.

Speaker Change: Welcome Nigel Clinique to the Sofia community.

Speaker Change: Beyond the U S. We achieved major recent wins in the Asia Pacific market as well in.

Jurgi Camblong: In India, we continued our strong momentum from Q4 and signed a partnership with Trend Life Sciences in Bangalore, encompassing a broad-based collaboration that aims to bring Sophia Didier's oncology applications to patients across the country. Trend is an established partner of biopharma companies in India, and we are excited to partner with them to improve patient health outcomes. The addition of STRAND, along with recently announced partners in India, such as Carkinos and Tata, positions us very well in a country which is not only the most populated in the world but is also developing very quickly in terms of precision medicine.

Speaker Change: In India, we continued our strong momentum from Q4 and signed the partnership with <unk> Life Sciences in Bangalore, and compassion of broad based collaboration that tends to bring Sofia dpm's oncology applications to patients across the country.

Speaker Change: <unk> is an established partner a biopharma company in India.

Speaker Change: And we are excited to partner with them to improve patient outcomes.

Speaker Change: The addition of trend along with recently announced partners and yes, the chess cartoonists in better positions us very well in the country, which is not only the most populated in the world, but also developing very quickly in terms of precision medicine.

Speaker Change: I would tell you the India and most of approach to announce today for the first time that Samsung Medical center into South Korea, when <unk>. This month's using our world class solid tumor application for <unk> HRD.

Jurgi Camblong: Outside of India, I'm also proud to announce today for the first time that Samsung Medical Center in Seoul, South Korea, went live on Sophia DDM this month using our world-class solid tumor application for HRT. With the addition of Samsung Medical Center, we now work directly with four of the top five oncology hospitals in the world. This list now includes Samsung, Mayo Clinic, Gustave Rossier, and MSNBC.

Speaker Change: With the addition of Samsung Medical Center, we now work directly with four of the top five oncology hospitals seem to work.

Speaker Change: This list now includes Samsung Mayo clinic, Gustaf Wuxi and MSP.

Jurgi Camblong: It's rewarding to see these leading healthcare institutions continue to recognize Sophia Didion's best-in-class analytical capabilities, as well as the platform's ability to save customers valuable time and resources. In that time, I'm excited to announce that in Mexico, we expanded our relationship with IMECHAN, the Instituto Nacional de Medicina Genomica, one of Mexico's national institutes and a top research center in the country. An existing customer of ours is now adopting hereditary cancer applications in addition to the solid tumor applications they already use. By Mekhen estimates, these applications will be used to perform approximately 8,000 analyses per year.

Speaker Change: So rewarding to see this leading edge train institutions continue recognized for <unk> best in class analytical capabilities.

Speaker Change: Well as the platform's ability to save customers valuable time and resources.

Speaker Change: In Latam I'm excited to announce that in Mexico, we expanded our relationship with Emerson the Instituto Nokia now that they may be seeing economic cap one of Mexico's national institution Institutes and a top research center in the country.

In Michigan.

Speaker Change: And existing customer of ours is now adopting a really terrible cancer applications. In addition to the solid two more application. They already use immersion estimates. These applications will be used to pro forma approximately 8000 analytics per year.

Speaker Change: The last market that I will highlight is EMEA.

Jurgi Camblong: The last market that I will highlight is EMEA. Q1 performance in EMEA was representative of our company's performance overall, with forward-looking indicators such as bookings and new logos outperforming internal expectations, but revenue failing slightly. The modest revenue growth in EMEA can be primarily attributed to exaggerated seasonal consumption trends in Italy, Spain, and France, as well as generally lower consumption levels than expected.

Speaker Change: Q1 performance in EMEA was representative of our company's growth four months overall with forward looking indicators, such as bookings and new logos outperforming internal expectations, but revenue sailings slightly short.

Speaker Change: Modest revenue growth in EMEA can be primarily attributed to exaggerate it consumption trends in Italy, Spain and France.

Speaker Change: January had lower consumption level than expected.

Jurgi Camblong: Based on the recent trends and customer discussions, we expect revenue performance to return to previously expected growth levels as consumption peaks and new business 1 in Q4 and Q1 is onboarded over the course of the year. On that note, I will take a moment to highlight some of our major new business wins in EMEA, which again were ahead of our internal expectations. First, in the U.K.; I'm proud to announce today the signing of CINOVIS, a London-based lab providing services to the NHS.

Speaker Change: Based on the recent trends in customer discussions, we expect revenue performance to return to previously expected growth levels.

Speaker Change: <unk> picks up and new business won in Q4 and Q1 is on boarded over the course of the year.

Speaker Change: On that note I will take a moment to highlight some of our major new business wins in EMEA, which again, we're ahead of our internal expectations.

Speaker Change: First in the UK I am proud to announce today, the signing of Sunobe's, London based lab, providing services to the NHS will be adopting our new liquid biopsy application emiscan access powered with Sofia DBM.

Jurgi Camblong: We'll be adopting our new liquid biopsy application, MSK Access, powered by Sophia DDM. CINOVIS provides lab services to CINLAB, as well as NHS institutions such as Guy's and St. Thomas and King's College Hospitals. Further, they joined the Royal Marston Hospital as yet another NHS-related provider to recently adopt Sophia Didier.

Speaker Change: <unk> provides services to <unk> lab as well as NHS institutions, such as guys in central mass and Kings College of CEO.

Speaker Change: Further they joined the Royal Marsden Hospital as yet another NHS related provider to recently adopted <unk>.

Jurgi Camblong: I'm excited to keep you updated on our progress with the NHS in the coming quarter, speaking of major European health care institutions, and also proud of the recent announcement we made with UniLabs, one of the largest diagnostic labs in Europe, which went live on Sophia Lydiem in April. Unilabs, which conducts more than 221 million tests annually, is the latest of many central labs to have adopted Sophia Dizem's world-class HRD approach. Beyond the UK, I'm also excited to announce today that we deployed Sophia DDM in a resounding three new countries in the EMEA during Q1.

Speaker Change: Im excited to keep you updated on our progress with the NHS in the coming quarters.

Speaker Change: Speaking of major European healthcare institutions, and also proud of the recent announcements we made with <unk> one of the largest diagnostic lab in Europe went live on Sofia <unk> in April.

Speaker Change: <unk> labs, which conducts more than 221 million tests annually is the latest of many central labs to have adopted Sofia Dpm's World class HR the application.

Speaker Change: Beyond the U K I'm also excited to announce today that we deployed Sofia DBM and the resounding three new countries in EMEA. During Q1. This includes Romania, Norway and our first customer in Africa in Nigeria.

Jurgi Camblong: This includes Romania, Norway, and our first customer in Africa, in Nigeria. In Romania, Personal Genetics Romania, a major central lab located in Bucharest and member of the largest private medical network in Romania, recently adopted Sophia Didiem's world-class solid tumor and immune capture.

Speaker Change: In Romania, personal genetics, Romania, and nature of Central lab, located in Bucharest, and member of the largest private medical network in Romania recently adopted Sofia lithium world class solid tumor and enhance applications.

Jurgi Camblong: In Norway, Stavanger University Hospital, one of Norway's largest hospitals, adopted our new liquid biopsy application, MSK-Access, powered by Sofialis. And lastly, Syndicate Bio, a precision medicine lab in Nigeria that aims to provide cancer testing to over 1 million cancer patients in Africa each year, also adopted MSK Access powered by Sophia DD. Syndicate Bio joins the Sophia Didion community as part of our collaboration with MSK and AstraZeneca, which aims to advance health equity on a global scale by expanding access to cancer testing work. SyndicateBio marks the expansion of our footprints into Africa and represents yet another proof point of how the decentralized model sustainably enables local institutions to support their patients.

Speaker Change: In Norway, 700 University Hospital, one of Norway's largest hospital adopted our new liquid biopsy application MSP access powered with Sofia.

Speaker Change: And lastly, syndicate Bayou, a precision medicine lab in Nigeria that aims to provide cancer testing to the over 1 million cancer patients in Africa. Each year also adopted MSP access powered with Sofia DVA since.

Speaker Change: Syndicates bio joins the Sofia lithium community as part of our collaboration with MSA in Australia, and again, we chose to advance <unk> equity on a global scale by expanding access to cancer testing worldwide.

Speaker Change: Syndicate bio marks the expansion of our footprint into Africa and represents yet another proof point of how the decentralized model sustainably enables local institutions to support their patients need that.

Jurgi Camblong: The deployment of MSK access powered by Sophia Lydian in Africa also represents a significant breakthrough in a MSK initiative started more than 15 years ago to improve outcomes for people with cancer in low and middle-income countries in sub-Saharan Africa. I am incredibly proud of this important step toward our mission. All of the progress I've spoken about today with respect to Sophia Lydian's liquid biopsy applications, and especially MSK-Access powered by Sophia Lydian, has been incredibly impressive, even more so when you consider that the application's official commercial launch was only last year.

Speaker Change: Deployment of <unk> is powered with Sofia lithium in Africa also represents a significant breakthrough on the MSCI initiative started more than 15 years ago to improve outcomes for people with cancer in low and middle income countries in sub Saharan Africa.

Speaker Change: Incredibly proud of this important step towards our mission.

Speaker Change: All of the progress I've spoken about today with respect to Sofia <unk> liquid biopsy application and especially Emiscan access powered with Sofia lithium has been incredibly impressive and even more so when you consider that the applications of shelf commercial launch was only last week.

Speaker Change: So our prelaunch activities are resounding named customers have already adopted MSP access powered with Sofia is again.

Jurgi Camblong: For pre-launch activities, a resounding nine customers have already adopted MSK Access powered by Sophia DDM. These institutions include BioReference and Tennessee Oncology in the U.S., Oncoelix in Canada, Daza in Brazil, Syndicate Bio in Nigeria, Sinobis in the UK, Stavanger University Hospital in Norway, Toulouse Oncopole in France, and Sofiva Genomics in Taiwan. Customers are attracted to MSK Access powered by Sophia DDM for three primary reasons. First, the application leverages our proprietary Cumin and Pepper algorithms to accurately detect variants in blood samples with low input material and maintain the high level of accuracy of the MSK access test when deploying it in a decentralized manner.

Speaker Change: This is <unk>, biodefense and Tennessee oncology in the U S onshore.

Speaker Change: <unk> seen kind of that same Brazil syndicate Bayou in Nigeria, She novice and the UK seven jewelry University hospital in Norway to lose Oncoprotein friends and sofa genomics in Taiwan.

Speaker Change: Customers are attracted to emmis catches powered with Sofia DBM for three primary reasons.

Speaker Change: The application Leverages, our proprietary trimming and paper algorithms to accurately detect variance from blood samples with low input material and maintained the high level of factor a few of the mesquite access desk when deployed units.

Speaker Change: <unk> mother second we deploy to more normal approach that removes biological false positives and enables customers to confidently identify relevant south Russians by also saving them valuable time and resources.

Jurgi Camblong: Second, we deploy a tumor normal approach that removes biological false positives and enables customers to confidently identify relevant alterations by also saving them valuable time and resources. And third, MSK Access, powered by Sophia DVM, allows customers to retain ownership of their samples and data, and therefore enables them to develop their own expertise and become lighthouses for precision medicine. As you can tell by the strong progress we have made pre-launch, this unique value proposition is responding with customers, and our liquid biopsy offering is driving significant demand in the market.

Speaker Change: And third the MSP access powered with Sofia DBM allows customers to retain ownership of their samples and data and therefore enables them to develop their own expertise and become like houses for precision medicine.

Speaker Change: As you can tell by the strong progress we have made prelaunch. This unique value prop are resonating with customers and our liquid biopsy offering is driving significant demand in the market.

Speaker Change: Such demand was evidenced during the liquid biopsy launch events, but we also see that our offices last week in Switzerland.

Jurgi Camblong: Such demand was evident during the liquid biopsy launch event that we hosted at our offices last week in Rde, Switzerland. The event included attendees from MSK, many current and potential MSK access adopters from around the world and over 35 key opinion leaders across Europe, as well as our biopharma partners. Thanks to you, to those who joined us.

Speaker Change: Switzerland.

Speaker Change: The event included attendees from MSA, many strengths and potential image capture adopt search from around the world and over 35 key opinion leaders across Europe as well as our Biopharma partners.

Speaker Change: Thanks to you to those who join us.

Jurgi Camblong: We're excited to work together to expand access to world-class cancer testing in liquid biopsy. On that note, I want to highlight that the benefits of MSK Access powered by Sophia DVM not only resonate with clinical customers but with our biopharma customers as well. Biopharma companies are mutually interested in expanding access to cancer testing worldwide and have demonstrated this by sponsoring the deployment of SOFIA DDM in several instances. More equitable and accurate diagnosis improves market access broadly. Additionally, more accessible cancer testing enables better identification of patients for clinical trials, which can accelerate the development cycles of targeted therapy.

Speaker Change: We're excited to work together to expand access to world class cancer testing in liquid biopsy space.

Speaker Change: On that note I want to highlight that the benefits of MFC axis powered with Sofia DBM, not only resonates with our customers, but with our biopharma customers as well.

Speaker Change: Biopharma companies are mutually interested in expanding access to cancer testing worthwhile and have demonstrated such by sponsoring the deployment of Sofia DBM in several instances.

Speaker Change: More equitable and accurate diagnosis improved market access broadly.

Speaker Change: Additionally, more accessible cancer testing enables better identification of patients for clinical trials, which can accelerate the development cycle for targeted therapies.

Jurgi Camblong: As announced previously, we recently entered a major collaboration with AstraZeneca to sponsor the deployment of SMSK access globally. The contract was finalized last month with a plan to sign numerous institutions across the globe to offer SMSK access in 2024. MSK Access powered by Sophia Lydian offers AstraZeneca a unique platform to accelerate drug deployment and development. For institutions signed as part of this collaboration, AstraZeneca will fund the establishment of programs and evidence generation activities.

Speaker Change: As announced previously we recently entered a major collaboration with Astrazeneca to sponsor the deployment of its Mexican access globally.

Speaker Change: The contract was finalized last month with a plan to say numerous institutions across the globe to Emiscan access in 2024.

Speaker Change: <unk> powered with Sofia D. DM offers astrazeneca, a unique platform to accelerate drug deployment and development.

Speaker Change: For institutions signed as part of this collaboration Astrazeneca will fund the setup programs and evidence generation activities.

Jurgi Camblong: Apart from sponsored deployment of our platform, biopharma companies are also eager to gain access to the genomic and multimodal data computed by our platform, as well as the advanced multimodal algorithms that we've developed on the data, which are housed in Sophia Kirkpatrick. In particular, our multi-modal data offering provides biopharma companies with critical insights for their phase 2 trial and market access needs, as our sophisticated algorithms can be used to identify specific characteristics of populations that are failing to respond to the current standards of care.

Speaker Change: Apart from sponsored deployment of our platform Biopharma companies are also eager to gain access to the genomic and multimodal data computed by our platform as well as the advanced community more that are going down so that we have developed on the data.

Speaker Change: Which are housed in Sofia curbed back.

Speaker Change: In particular, our mental model data offering provides biopharma companies with critical insights for the phase II trail and market access needs as our sophisticated algorithms can be used to identify specific characteristics of populations.

Speaker Change: Failing to response to the current standards of care.

Speaker Change: Last quarter.

Jurgi Camblong: Last quarter, I provided an update on a recent project with one of our biopharma partners, where Sophia Kirpat identified a signature in subpopulations of lung cancer patients that could indicate different treatment effects of the drug. As you can imagine, this has the potential to be valuable to the biopharma customer for both market access and trial design. Beyond our learned capabilities, I'm excited to announce today that we recently signed our first breast cancer pilot.

Speaker Change: Provided an update on our recent project with one of our Biopharma partners, whereas Sofia capacity identified a signature and super collections of lung cancer patients, which could indicate different treatment effects of the drug.

Speaker Change: As you can imagine this has the potential to be valuable to the biopharma customer for both market access and trail design.

Speaker Change: Beyond our alerting capabilities and excited to announce today that we recently signed our first breast cancer pilot.

Jurgi Camblong: The project will follow a similar approach as taken for the lung project and will leverage Sophia Kerr Path multimodal factory to identify novel multimodal biomarkers and advance personalized treatment for stage four hormone positive breast cancer patients. The collaboration will be a proof of concept for applying machine learning approaches to breast cancer patients and demonstrate that such approaches can identify multimodal predictive signatures of response to therapy.

Speaker Change: The project will follow a similar approach is taken for the non project and we leverage Sofia Curt path multimodal factory to identify novel Biomarkers and advance personalized treatment for stage for hormone positive breast cancer patients.

Speaker Change: The collaboration will be a proof of concept for applying machine learning approaches to breast cancer patients and such.

Speaker Change: Such approaches can identify multi modal predictive signatures of response to therapy.

Speaker Change: More to come on this topic in the future.

Speaker Change: Beyond lung and breast, we recently expanded our multimodal offering for kidney cancer as well.

Jurgi Camblong: More to come on this topic in the future. Beyond lung and breast cancer, we recently expanded our multi-modal offering to kidney cancer. In Q1, we announced the publication in Nature's Precision Oncology Journal of a multi-year study between us and the French Kidney Cancer Research Network, Urocesser, in which we analyzed 3,300 kidney patient cases.

Speaker Change: In Q1, we announced the publication in nature precision oncology journal of Kaminski gears could lead between us and the French kidney cancer Research network beautiful success.

Speaker Change: In which we analyzed 3000 kidney patient cases.

Jurgi Camblong: In doing so, we developed algorithms to predict post-op outcomes and validate immuno-oncology for those facing renal cell carcinoma. Going forward, we're excited to bring our multi-modal analytics capabilities for lung, breast, and kidney cancer, among others, to even more biopharma companies across the globe and capitalize on the large pipeline we have in the. Along the lines of fueling our future growth, I'm also proud today to make one final important announcement. In light of some of the recent market trends, we believe we are in a position of strength to be able to take advantage of and accelerate our growth through organic and or inorganic emissions.

Speaker Change: In doing so we developed algorithms to predict post op outcomes and validates immuno oncology produce facing renal cell carcinoma.

Speaker Change: Going forward, we're excited to bring our immunity model analytics capability for lung breast and kidney cancer, among others to even more biopharma companies across the globe and capitalize on the large pipeline we have in this area.

Speaker Change: So along the lines of fueling our future growth and most approach to day to make one final important announcements.

Speaker Change: In light of some of the recent market trends. We believe we are in a position of strength.

Speaker Change: To be able to take advantage and accelerate our growth through organic and inorganic initiatives. We are therefore entered into an agreement with perceptive advisors for up to <unk>.

Jurgi Camblong: We have therefore entered into an agreement with perceptive advisors for up to $50 million in-depth financing to provide additional capital flexibility to pursue our growth strategy. I'm pleased to further reinforce our already strong balance sheet while providing us with increased buffer and flexibility on our path to profitability. And with that, I will now turn the call over to Ross, who will provide more details about our financial performance in Q1 and outlook for the rest of the year. Thank you, Jurgi. And good morning, everyone.

Speaker Change: $50 million in debt financing to provide additional capital flexibility to pursue our growth strategy.

Speaker Change: I'm pleased to further reinforce our already strong balance sheet, while providing us with increased but for and flexibility on our path to profitability.

Speaker Change: And with that I will now turn the call over to Ross, who will provide more details of both our financial performance in Q1 and outlook for the rest of the year.

Ross: Thank you <unk> and good morning, everyone as Jeremy highlighted Q1 featured mixed results as forward looking indicators such as bookings were strong with revenue for the quarter came in a touch lighter than expected.

Ross Jordan Muken: As Jurgi highlighted, Q1 featured mixed results, as forward-looking indicators such as bookings were strong, but revenue for the quarter came in a touch lighter than expected. Total revenue for the first quarter of 2024 was $15.8 million compared to $14 million for the first quarter of 2023, representing year-over-year growth of 13%. Constant currency revenue growth was 12%.

Ross: Total revenue for the first quarter of 2024 was $15 8 million compared to $14 million for the first quarter of 2023, representing year over year growth of 13%.

Ross: Instant currency revenue growth was 12% plus.

Ross Jordan Muken: Platform analysis volume was approximately 84,000 for the first quarter of 2024, compared to approximately 77,000 for the first quarter of 2023. Year-over-year growth in analysis volume was 9% or 11% when excluding COVID-related volume. EMEA and Latin America experienced the softest growth during Q1, partially offset by significant strength in North America and Asia-Pacific, which grew at 44% and 39%, respectively.

Ross: Platform analysis volume was approximately 84000 for the first quarter of 2024 compared to approximately 77000 for the first quarter of 2023 year over year growth in the analysis volume was 9% or 11% when excluding COVID-19 related volume.

Ross: In Latin America experienced the softest growth during Q1, partially offset by significant strength in North America, and Asia Pacific, which grew at 44% and 39% respectively.

Ross Jordan Muken: From an application standpoint, oncology outperformed rare and inherited disorders driven by strength in solid tumor testing. I will take a moment to provide a bit more detail behind the modestly lighter than expected volume and revenue for the quarter. I will also share a few more metrics and data points than we traditionally would on leading indicators in order to provide some context for our continued confidence in the underlying health of demand within the business. As Jurgi mentioned, this year got off to a lighter start than expected.

Ross: From an application standpoint oncology outperform rarely inherited disorders, driven by strength in solid tumor testing I will take a moment to provide a bit more detail behind the modestly lighter than expected volume and revenue for the quarter. I will also share a few more metrics and data points than we traditionally would on leading indicators in order to.

Ross: Provide some context for our continued confidence in the underlying health of demand within the business.

Ross: As Juergen mentioned this year got off to a later start than expected as a business. It is extra sensitive to working days and weeks January of 2020 for the holidays, which extended well into the first week, notably in EMEA. After speaking with many customers. We can surmise that this was at least partially to blame for the salt volume to start the year.

Ross Jordan Muken: As a business that is extra sensitive to working days and weeks, January of 2024 had holidays which extended well into the first week, notably in EMEA. After speaking with many customers, we can surmise that this was at least partially to blame for the soft volume to start the year. In addition, setup times associated with new business were slightly longer than expected, as we saw more customers adopting new sequencers and more sophisticated applications.

Ross: In addition setup times associated with new business with slightly longer than expected as we see more customers adopting new sequencers and more sophisticated applications. We currently believe this may add up to three months to setup time lines, meaning that we will likely see a larger impact from recent key wins in late 2024 and more.

Ross Jordan Muken: We currently believe this may add up to three months to setup timelines, meaning that we will likely see a larger impact from recent Q-ins in late 2024 and more notably in 2025. And last, we did see one biopharma project unexpectedly become delisted, as sales cycles appear to be elongating for larger deals. Beyond these factors, we are seeing many positive trends in the business. For existing customers, consumption picked up considerably in March, and this momentum is continuing now into April and May.

Ross: Notably in 2020 fives, unless we did see one biopharma projects unexpectedly be comfortably as sales cycles appear to be elongated for larger deals as we have noted prior fluctuations and deal timing can have outsized impacts on a quarterly cadence of reported revenue.

Ross: All of these factors we are seeing many positive trends in the business for existing customers consumption picked up considerably in March and this momentum is continuing now into April and May. In addition, many customers have also reconfirm their volume assumptions for the full year. Despite the late start further.

Ross Jordan Muken: In addition, many customers have also reconfirmed their volume assumptions for the full year, despite the light start. Further, reaction shipments for our bundled solutions were strong in Q1, up 26% year over year, with even further levels of acceleration exhibited in April.

Ross: Auction shipments for our bundled solutions were strong in Q1 up 26% year over year with even further levels of acceleration exhibited in April these shipments of partner wet lab components are typically a reliable indicator of future platform usage is trend leads us to believe that the usage of the platform should sustain.

Ross Jordan Muken: These shipments of partner wet lab components are typically a reliable indicator of future platform usage. This trend leads us to believe that the platform usage should sustain and normalize levels going forward. With respect to new business, forward-looking indicators remain strong. Clinical bookings grew 32% year-over-year in the quarter, nicely above our internal expectations.

Ross: Dane at normalized levels going forward.

Ross: With respect to new business forward looking indicators remained strong clinical bookings grew 32% year over year in the quarter nicely above our internal expectations. We also signed 27, new logos in Q1, adding to the 35 new customers. We signed in Q4 2023 last pipeline for the clinical Biz.

Ross Jordan Muken: We also signed 27 new logos in Q1, adding to the 35 new customers we signed in Q4 2023. Last, pipeline for the clinical business grew over 50% year-over-year in Q1, and the pipeline for the biopharma business more than doubled, indicating a healthy and growing end market. Specifically, we are seeing interest around MSK access powered by Sophia DDM in both clinical and biopharma markets.

Ross: <unk> grew over 50% year over year in Q1, and the pipeline for the Biopharma business more than doubled indicate a healthy and growing end markets. Specifically, we are seeing interest around MSP axis powered with Sofia DBM in both clinical and Biopharma markets.

Ross Jordan Muken: This marks a second consecutive quarter of strong forward-looking indicators, which, combined with the return to expected consumption levels, as well as the actions we are taking to reduce implementation times and address biopharma delays, gives us confidence for a strong back half of 2024. Moving on to an update on other key business metrics. Core genomic customers were 463 as of March 31, 2024, up from 437 in the prior year period and up sequentially by 13 customers relative to Q4 of 2023.

Ross: <unk> the second consecutive quarter of strong forward looking indicators, which in combination with the return to expected consumption levels as well as the actions we are taking to reduce implementation times and address biopharma delays gives us confidence for a strong back half of 2024.

Ross: Moving on to an update on other key business metrics core genomic customers were 463 as of March 31, 2024 up from $4 37 in the prior year period and up sequentially by 13 customers relative to Q4 of 2023.

Ross Jordan Muken: Annualized revenue churn rate was approximately 4.5% for Q1 2024, slightly higher than our expectations due to the loss of one customer via acquisition in Latin America. Net dollar retention, which is net of revenue churn for the year, improved to 123%, up 1600 basis points from 107% in Q1 2023. Constant currency net dollar retention excluding COBR-related revenue was 122% as compared to 121% in Q1 2023.

Ross: Annualized revenue churn rate was approximately four 5% for Q1 2024 slightly higher than our expectations due to the loss of one customer via acquisition in Latin America.

Ross: Net dollar retention, which is net of revenue churn for the for the year improved to 123% up 600 basis points from 107% in Q1 2023 constant currency net dollar retention, excluding Cobra related revenue was 122%.

Ross: Compared to a 121% in Q1 2023.

Ross Jordan Muken: Gross profit for the first quarter of 2024 was $10.4 million compared to gross profit of $9.7 million in the first quarter of 2023, representing year-over-year growth of 7%. Gross margin was 65.9% for the first quarter of 2024 compared with 69.4% for the first quarter of 2023. Adjusted gross profit was $11.1 million, an improvement of 9.9% compared to adjusted gross profit of $10.1 million for the first quarter of 2023. Adjusted gross margin was 70.5% for the first quarter of 2024 compared to 72.5% for the first quarter of 2023.

Ross: Gross profit for the first quarter of 2024 was $10 4 million compared to gross profit of $9 7 million in the first quarter of 2023, representing year over year growth of 7% gross margin was 65, 9% for the first quarter of 2024, compared with 69, 4% for.

Ross: The first quarter of 2023.

Ross: Adjusted gross profit was $11 1 million an improvement of nine 9% compared to adjusted gross profit of $10 1 million for the first quarter of 2023 adjusted gross margin was 75% for the first quarter of 2024 compared to 72, 5% for the first quarter of 2023.

Ross: Despite the modest softness in revenue this quarter, we are proud of our ability to manage costs and scale compute accordingly in order to maintain adjusted gross margins above 70%.

Ross Jordan Muken: Despite the modest software revenue this quarter, we are proud of our ability to manage costs and scale compute accordingly in order to maintain adjusted gross margins above 70%. The comp for this quarter was also tougher as we recognized the remainder of a one-time benefit to computational storage-related costs from our Microsoft partnership in the first quarter of 2023, which previously benefited gross margins by about 180 basis points. Total operating expenses for the first quarter of 2024 were $29.2 million, compared to $29 million for the first quarter of 2023.

Ross: This quarter was also tougher as we recognize the remainder of a onetime benefit to computational storage related costs from our Microsoft partnership in the first quarter of 2023, which previously benefited gross margins by about 180 basis points.

Ross: Total operating expenses for the first quarter of 2024 were $29 2 million compared to $29 million for the first quarter of 2023 across the functions. We continue to benefit from lower head count on a year over year basis. Additionally, I remain pleased with our progress on the G&A side, where we also continue to benefit from lower professional service.

Ross Jordan Muken: Across functions, we continue to benefit from lower headcount on a year-over-year basis. Additionally, I remain pleased with our progress on the G&A side, where we also continue to benefit from lower professional service fees and the optimization of our public company costs. R&D expenses remain flattish this quarter as we continue to focus on increasingly high ROI projects. Sales and marketing expense were up a touch, primarily due to higher commission payouts on new business. Operating loss for the quarter was $18.8 million compared to $19.3 million in the first quarter of 2023.

Ross: And the optimization of our public company costs R&D expenses remained flattish this quarter as we continue to focus on increasingly high ROI projects sales and marketing expense was up a touch primarily due to higher commission payouts on new business wins operating loss for the quarter was 18.

Ross: $8 million compared to $19 $3 million in the first quarter of 2023 adjusted operating loss for the first quarter of 2024 was $14 $1 million compared to $16 2 million for the first quarter of 2023, we continue to be pleased with our trajectory towards profitability and believe the additional head count actions.

Ross Jordan Muken: Adjusted operating loss for the first quarter of 2024 was $14.1 million compared to $16.2 million for the first quarter of 2023. We continue to be pleased with our trajectory toward profitability and believe the additional headcount actions we took in the second half of 2023 and incremental discretionary expense controls implemented were necessary to sustain the positive momentum across the balance of 2024. Of note, below the line in this quarter, we did have a significant favorable unrealized FX gain that benefited net income.

Ross: We took in the second half of 2023 and incremental discretionary expense controls implemented where necessary.

Ross: Stay in the positive momentum across the balance of 2024 of note below the line in this quarter. We did have a significant favorable unrealized FX gain that benefited net income lastly, total cash burn for the first quarter of 2024 with $19 5 million compared to $16 8 million in the prior year.

Ross Jordan Muken: Lastly, total cash burn for the first quarter of 2024 was $19.5 million compared to $16.8 million in the prior year quarter, representing 16.3% year-over-year growth. The increase in cash burn could be attributed to unfavorable FX translation on cash of approximately $3 million. Excluding this unfavorable FX impact, operating cash burn was down slightly year-over-year in Q1.

Ross: Order, representing 16, 3% year over year growth the increase in cash burn could be attributed to unfavorable FX translation on cash of approximately $3 million. Excluding this unfavorable FX impact operating cash burn was down slightly year over year in Q1, we remain happy and cash utilization.

Ross Jordan Muken: We remain happy with our cash utilization trend and are on track with respect to our medium-term liquidity trajectory. Cash and cash equivalents were approximately $103.7 million as of March 31, 2024. Turning to our 2024 outlook, given the return to expected consumption levels in March, healthy observed growth in reaction shipments, strong bookings of new logos in Q1, and actions taken to accelerate setup times, we believe we will be able to mitigate the modest revenue shortfall experienced in January over the course of the year.

Ross: <unk> trend and are on track with respect to our medium term liquidity trajectory with cash and cash equivalents were approximately $103 $7 million as of March 31, 2024, turning to our 2024 outlook given the return to expected consumption levels in March healthy observe growth.

Ross: And reaction shipments strong bookings and new logos in Q1, and the actions taken to accelerate setup times. We believe we will be able to mitigate the modest revenue shortfall experienced in January over the course of the year. Therefore, Sofia genetics is reaffirming our full year revenue guidance for 2024 of 78.

Ross Jordan Muken: Therefore, Sophia Genetics is reaffirming its full-year revenue guidance for 2024 of $78 million to $81 million, or revenue growth of 25% to 30% year-on-year. With respect to seasonality, we now expect revenue to be notably second-half weighted in 2024, with underlying utilization following a typical quarterly cadence, while new business will be skewing revenue to the third and fourth quarters. Additionally, we expect pharma-related revenue to be stronger in the second half, given the recognition requirements of recently signed awards, as well as elongated new business timelines.

Ross: To $81 million or revenue growth of 25% to 30% year on year.

Ross: With respect to seasonality, we now expect revenue to be notably second half weighted in 2024 with underlying utilization following a typical quarterly cadence, while new business will be skewing revenue to the third and fourth quarter. Additionally, we expect pharma related revenue to be stronger in the second half given the recognition with requirements of recently.

Ross: Words, as well as elongated new business timelines. Additionally, we would note FX has weakened modestly from our original expectations, creating an incremental headwind in <unk> of a few hundred basis points.

Ross Jordan Muken: Additionally, we would note FX is weakened modestly from our original expectation, creating an incremental headwind in 2Q of a few hundred bases. Following on our solid cost performance in Q1 2024, Sophia Genetics also reaffirms our adjusted gross margin guidance in the range of 72.5% to 72.7%, as well as our adjusted operating loss guidance of between $45 million and $50 million. Furthermore, we remain confident in our medium-term path to adjusted operating profitability. We have taken the necessary cost actions to expedite that goal and continue to be obsessed with capital efficiency.

Ross: Our solid cost performance in Q1 2020 for Sofia Genetics also reaffirms our adjusted gross margin guidance in the range of 72, 5% to 72, 7% as well as our adjusted operating loss guidance of between $45 million and $50 million loss.

Ross: Furthermore, we remain confident in our medium term path to adjusted operating profitability, we've taken the necessary cost actions to expedite that goal and they continue to be obsessed with capital efficiency. This requires sustaining medium term revenue momentum at our previously communicated targeted levels, while ensuring a reasonable timeframe to cash flow.

Ross Jordan Muken: This requires sustaining medium-term revenue momentum at our previously communicated targeted levels while ensuring a reasonable timeframe for cash flow generation. To achieve this in 2024, we will continue to revisit our discretionary expenditures and execute identified savings in systems, professional services, and certain public company costs. The combined nature of these items and the natural operating leverage in the business from strong revenue growth will further our path to adjusted operating profitability in the next two-plus years.

Ross: To achieve this in 2024, we will continue to revisit our discretionary expenditures and executed in identified savings in systems professional services and certain public company costs. The combined nature of these items and the natural operating leverage in the business from strong revenue growth will further our path to adjusted operating profitability in the next two plus years.

Ross Jordan Muken: Lastly, I'm pleased to share that we have recently entered into an agreement with Perceptive Advisors for up to $50 million in debt financing to provide additional capital flexibility to pursue our growth strategy, which may include both organic and inorganic growth efforts. As part of the agreement, we will be drawing $50 million immediately, with an additional tranche of $35 million available through March 2026 for us to pursue the right opportunities. The interest on the loan is payable in cash on the outstanding principal amount at a per-annual rate equal to the sum of the higher of the applicable secured overnight financing rate or the minimum floor rate of 4% plus 6.25%.

Ross: Lastly, I am pleased to share that we have recently entered into an agreement with perceptive advisors for up to $50 million in debt financing to provide additional capital flexibility to pursue our growth strategy. This may include both organic and inorganic growth efforts as part of the agreement we will be drawing $50 million of immediately with additional tranche of 35.

Ross: Million available through March 2026 for us to pursue the right opportunities.

Ross: The interest on the loan is payable in cash on the outstanding principal amount and a per annual rate equal to the sum of the higher of the applicable secured overnight financing rate or the minimum floor rate of 4% plus.

Ross: Two 5% under the terms of the agreement perceptive has been issued warrants to purchase 400000 shares of the company's stock as of the closing date with an exercise price equal to the 10 day volume weighted average price preceding the closing date warrants to purchase 200000 shares will be issued immediately and warrants to purchase an additional.

Ross Jordan Muken: Under the terms of the agreement, Perceptive has been issued warrants to purchase 400,000 shares of the company's stock as of the closing date, with an exercise price equal to the 10-day volume weighted average price preceding the closing date. Warrants to purchase 200,000 shares will be issued immediately, and warrants to purchase an additional 200,000 shares will be issued upon drawing of the subsequent tranche. In addition, this transaction further reinforces our already strong balance sheet, and we're pleased to have the support of Perceptive, a recognized leader in growth capital financing. With that, I would like to turn the call back over to Jurgi for his closing remarks before we take your questions. Thank you, Ross.

Ross: 200000 shares will be issued upon drawing up the subsequent tranche. In addition, this transaction further reinforces our already strong balance sheet and we're pleased to have the support of perceptive a recognized leader in growth capital financing with that I would like to turn the call back over to Europe for the closing remarks before we take your questions.

Europe: Thank you Russ while our performance this quarter was mixed we remain quite optimistic about our path forward.

Jurgi Camblong: While our performance this quarter was mixed, we remain quite optimistic about our path forward. Sophia's success depends on our ability to expand access to data-driven medicine by using AI to deliver world-class care to patients across the globe. In closing, thank you to our Sophia colleagues, partners, customers, and investors for joining us on our journey. Without you, none of this would be possible.

Europe: So success comes from our ability to expand access to date Saturday may be seen by using AI to deliver broadcast character patients across the globe.

Europe: In closing, thank you to our <unk> partners customers and investors for joining us in our journey without you none of this would be possible.

Jamie: Please note, we are presenting at the RBC Health Care Conference next Tuesday in New York City. I look forward to continuing to update you on Sophia's future success in democratizing data-driven medicine. Operator, you may now open the line for questions. Ladies and gentlemen, the line is now open. To ask a question, you may press star and then one on your touch-tone phone. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to ensure the best sound quality.

Europe: Please note we are presenting at the RBC Healthcare Conference next Tuesday in New York City.

Europe: I look forward to continuing to update you on Sofia features successful Democrats, taking data driven medicine.

Speaker Change: Operator, you May now open the line for questions.

Speaker Change: Ladies and gentlemen, the line is now open for questions.

Jamie: So with all your questions, you may press star and two. Once again, that is star and one to add a question. We'll pause momentarily to assemble the rocket. Our first question today is from Conor McNamara from RBC Capital Markets.

Speaker Change: To ask a question you May press Star then one on you touched on phones.

Speaker Change: We are using a speaker phone, we do ask that you. Please pick up your handset before pressing the key to ensure the best sound quality.

Speaker Change: With your all your questions.

Speaker Change: And to what.

Speaker Change: Once again that is star and one to join the question queue.

Speaker Change: We will pause momentarily to assemble the roster.

Europe: Our first question today comes from pattern the Mcnamara from RBC capital markets. Please go ahead with your question.

Conor Noel McNamara: Hey guys, thanks for taking the questions. I appreciate it. And, Ross, thanks for some of the clarity on the quarterly results. But can you just talk a little bit more about the revenue rate this year and your confidence in hitting all your guidance? How much is from the trends you saw in March and April with existing customers? And how much impact are you expecting from your new logo wins, which have been very strong in the last two quarters? Yes, thank you, Conor. This is Jurgi.

Mcnamara: Hey, guys. Thanks for taking the questions I appreciate it.

Mcnamara: Ross Thanks for some of the clarity on the quarterly results, but can you just talk a little bit more about the revenue ramp this year and your confidence in hitting on your guidance. How much is from trends you saw in March and April with existing customers and how much impact are you expecting for new logo wins, which have been very strong.

Mcnamara: Corners.

Yoga: Yes. Thank you Conor this is yoga.

Jurgi Camblong: So, first, as you may remember, most of the revenue we do in a given year is with customers we have signed in the past year. Now, said that, this year, we expect a strong back out, given the number of new logos we signed in Q4 2023, as well as in Q1 2024. So, as we were highlighting in the call, in Q1 2024, we signed 27 new logos, and in Q4 2023, we signed 35 new logos, right? And this compares to an historical average of 17 to 18 new logos per month.

Mcnamara: So.

Mcnamara: First as you May remember right most of the revenue we are doing there given your age with customers, we have signed to the the <unk>.

Yoga: Last year now said that this year, we expect a strong back half given the number of new logos, we signed in Q4 2023 as well as in Q1 2024, so as we were lacking in the call.

Yoga: In Q1 2024, we have signed 27, new logos in Q4 2023, we had same 35, new logos right and this compares to any theoretical average of 17 to 18 new logos.

Jurgi Camblong: So, we expect from one side that utilization continues to grow. We mentioned that we had a weak January for diverse reasons, that March was already much better, close to 30,000 analyses a month, and that we saw this trend in April. So, in terms of utilization, we're very confident that this will continue to fuel our growth for the next quarters. Then we mentioned that the conversion from bookings to routine and utilization was weaker than expected, although we knew that because of the new type of applications that are going to routine, being more sophisticated, or new sequencers would take more time, but we have taken action now, and we have a full team of professional services that is executing the max So, we expect these delays not to be extended.

Yoga: So we expect from one sites that.

Yoga: Well the utilization continues to grow we mentioned that.

Mcnamara: Yes.

Mcnamara: A weak January four diverse reasons that March was already much better close to 30000 analysis amongst and that we saw this trend in April so far in terms of utilization. We're very confident that this will continue fuel our growth for the next quarters, then we mentioned that.

Mcnamara: The conversion from bookings to.

Mcnamara: Routine and utilization at being weaker than expected, although we knew that because of the new type of applications that are going to routine being more sophisticated new sequence. It should take more time, but we have taken actions now than we ever.

Mcnamara: A full team of professional service.

Mcnamara: Is executing the Max skirt. So we expect these delayed nuts too.

Mcnamara: If like extended and the last one going back to the bookings the very strong performance, we had in bookings and the momentum we've seen the market.

Jurgi Camblong: And the last one, going back to the bookings, the very strong performance we had in bookings and the momentum we see in the market, with, in particular, specific types of applications like MSK Access, is really highlighting that the second part of the year will be strong in terms of utilization and hence revenue. Great, thanks for that clarity, Jurgi, and yeah, go ahead, Russell. You know, I was just going to say, and I would add on top of that if you think about what I noted in the script on reaction shipments, which is an indicator from our customers on, you know, forward utilization or forward analysis volume, you know, that was running in the high 20s.

Mcnamara: In particular, a specific type of applications like <unk> is really a lighting. That's the second part of the year will be strong in terms of utilization and hence revenue.

Speaker Change: Great. Thank you.

Mcnamara: A year ago.

Speaker Change: For us.

Speaker Change: I was just going to say and I would say on top of that if you think about what I noted in the script on reaction shipments, which you know is an indicator from our customers on.

Speaker Change: Forward utilization our forward analysis volume that was running in the high Twenty's and so I would say again the exit velocity of the quarter was quite good you know when we had originally guided we had already contemplated.

Jurgi Camblong: And so I would say, again, the exit velocity of the quarter was quite good. You know, when we originally guided, we had already contemplated in the guidance a relatively back half weighting to the revenue forecast. I would say, excluding, you know, the volume weakness in January, Q1 played out generally as we had expected. Obviously, that seasonal weakness we saw was pretty pronounced.

Speaker Change: In the guidance are relatively back half weighting to the revenue forecast I would say excluding the volume weakness in January Q1 played out generally as we had expected obviously that seasonal weakness we saw was pretty pronounced and so again I think what the exit velocity in the comments that you have.

Ross Jordan Muken: And so, again, I think with the exit velocity and the comments that Jurgi shared on the forward-looking indicators, we feel good around sort of the continued ramp back of the business to more normalized growth rates. And again, Jurgi mentioned a number of other mitigation efforts. And so with that, we kept the guide.

Speaker Change: We shared on the forward looking indicators, we feel good around sort of the continued ramp back up the business to more normalized growth rates.

Speaker Change: Again, you already mentioned a number of other mitigation efforts and so with that we kept the guide.

Speaker Change: Alright, thanks for that clarity really helpful.

Ross Jordan Muken: All right, thanks for that clarity. Really helpful. And just one question on testing volume.

Speaker Change: Just one question on <unk>.

Speaker Change: Testing volume.

Conor Noel McNamara: Well, do you anticipate any impact on testing volumes as a result of the recently proposed LDT regulations by the FDA? Yes, thank you, Conor. So obviously, that's something that we and many others are following closely, right? At Sophia, we have always striven for high standards because we believe that this is what is required to create trust in our industry. And so we very welcome, as we have said previously, as well, what's happening in the US. It was similar in Europe with IVDR.

Speaker Change: Do you anticipate any impact of testing volumes as a result of the recently proposed LDC regulations by the FDA.

Speaker Change: Yes. Thank you Conor so do you see that some seem that we and many others are following closely right.

Speaker Change: Sophia we have been always striving for high standards, because we believe that this is what is required to create trust in our industry.

Speaker Change: So we very welcome as well.

Speaker Change: I have said previously as well to what's happening in the U S. But similar in Europe with <unk>, We believe that standardization is basically making the market bigger because the constant comprehensive for a broader audience and potentially a broader set of patients that will benefit from those technologies.

Jurgi Camblong: We believe that standardization is basically making the market bigger because it becomes more comprehensive for a broader audience and potentially a broader set of patients that will benefit from those technologies. To that, I would add that our customers in the US, which would be the first ones impacted, are large academic centers and large reference labs. And so definitively, as well, institutions that are very well equipped with this new legislation and should benefit from this legislation with increased demand for sample testing.

Speaker Change: To that I would add to that our customers in the U S, which would be the first one impacted by our large academic centers and large reference labs, and so definitively as well institutions that are very well equipped with this new legislation should benefit from this legislation with increased.

Speaker Change: Demand in terms of sample testing.

Speaker Change: And we saw very strong volume growth in North America, particularly in the U S all quarter.

Jurgi Camblong: And Conor, we saw very strong volume growth in North America and particularly in the U.S. all quarter. So while we did see some of that seasonality in EMEA, the U.S. business, and this was across all applications, was actually quite healthy. So I think overall, you're not really seeing any change in behavior relative to the LDT legislation. As Jurgi mentioned, I've been spending quite a lot of time with customers. I think there's still a lot of elements of that legislation that still need to be sort of sorted and decided and firmed. But ultimately, long term, we see this as a positive for us. Great, thanks guys, and we'll see you next week.

Speaker Change: While we did see some of that seasonality in EMEA.

Speaker Change: The U S business and this was across all applications is actually quite healthy so I think overall.

Speaker Change: We're not really seeing any.

Speaker Change: And behavior relative to the LDP legislation as Juergen mentioned I've been spending quite a lot of time with customers I think there's still a lot of the elements of that legislation that still need to be sort of sorted and decided and firmed, but ultimately long term, we see this as a positive for us.

Speaker Change: Alright, Thanks, guys and we'll see them nicely.

Speaker Change: Thank you. Thank you very much.

Speaker Change: Our next question comes from payoffs of Art from Morgan Stanley. Please go ahead with your question.

Conor Noel McNamara: Thank you. Thank you very much. Our next question comes from Tejas Savant, from Morgan's family. Please go ahead with your question. Yes, good morning, Yuko, and a very good question. I would say the sample of our data, right now, is not yet big enough to give you precise numbers. But definitively, while Illumina sequencers are the dominating one, we see more people adopting other types of sequencing technologies. And in particular, I would highlight MGI and Element.

Art: Hello, This is <unk>.

Art: Thank you for taking our questions.

Art: Thank you.

Art: Undertaking that involved sequencing platforms are emerging.

Speaker Change: Vendors.

Speaker Change: Sure.

Speaker Change: Three months longer.

Speaker Change: Approximately what proportion of new logos.

Speaker Change: Emerging sequencing platforms and do you expect this dynamic to be more pronounced in one region versus another.

Speaker Change: Yes, good morning, nickel and very good question I would say.

Conor Noel McNamara: We have heard as well a little bit more about Pac-Value recently. And in terms of regions, I would say that maybe the US is the one where, as far as as of today, Illumina is still the preferred one.

Speaker Change: The sample our data right today, its not yet big enough to give you precise numbers.

Speaker Change: But definitively why Illumina sequencers.

Speaker Change: The dominating one we see more people adopt king other type of a sequencing tech launches and in particular I would highlight.

Speaker Change: MGA and the demand we have.

Speaker Change: Here as well a little bit more about backed by a recent thing.

Speaker Change: And in terms of regions I would say that.

Speaker Change: Maybe the U S is the one where it's for us of today Illumina is still the one that is the preferred one but in some other regions, we start seeing a little bit more competition.

Tejas Rajeev Savant: But in some other regions, we are starting to see a little bit more competition. That said, again, our view is that this will probably make the market bigger, and that it will be a healthy, basically competition between multiple vendors, and that, ultimately, there will be more data to compute for us. Taylor.

Speaker Change: That said again I'll review is that this will make for what would be the market bigger and that he will be announced the basic key competition between multiple vendors.

Speaker Change: And that estimate.

Speaker Change: There will be more data to complete for us.

Speaker Change: Great. Thank you for that color and then a separate question following on your debt.

Tejas Rajeev Savant: And then a separate question, following the new... Does M&A optionality come increasingly into focus for you? Could you remind us how you decide what to build in-house versus...

Speaker Change: Up to $50 million in financing does M&A optionality come increasingly in focus for you could you remind us how do you decide what to build in house versus.

Speaker Change: Bill.

Speaker Change: To acquire.

Speaker Change: Yes. Thank you you are quite will start and then let maybe.

Jurgi Camblong: Yes, thank you, Yuko. I will start and then, maybe, Ross can recap a bit the specificities of the financing we've announced with Perceptive. So typically, at Sophia, we've already, I would say, proven to be happy, if not eager, to develop things with external capabilities, right? So we apply the principle of open innovation at different levels. Historically, we acquired a company called Interactive Biosoftware, who brought us a technology called Alamut that ended up being a very, very successful add-on module in our platform. This technology is now being used broadly across the globe and with very important names, a lot of marquee names, in particular in the US that are using it.

Russ: Russ recap a bit.

Speaker Change: The specifics it is of the financing we announced with perceptive.

Speaker Change: Typically at Sofia, we've been already I would say it proven to be.

Speaker Change: Happy if not eager to develop things with external capabilities right. So we apply the principle of opening new version at different levels. Historically, we had acquired actually a company called interactive by our software growth us the technological allow more than end up being a very very successful add on.

Speaker Change: <unk> our platform.

Speaker Change: This technology now.

Speaker Change: Just broadly.

Speaker Change: Across the globe and with very important names a lot of marquee names in particular in the U S that are using that we are known we have applied a similar strategy a couple of years ago as well when it comes to multi modality, where we had acquired.

Jurgi Camblong: We applied a similar strategy a couple of years ago as well, when it comes to multimodality, where we acquired a technology from a very renowned mathematical institute in France, and on which we leveraged to build our multimodal offering and, for example, be able to make the partnership we had been talking about in the past with AstraZeneca and hopefully others, beyond lung, in breast and prostate, and colon cancer. And then beyond that, as a last example, MSK Access, right, which was a technology that was, in that case, developed by an academic center, and we embedded it within our platform. So to answer directly to your question, there are some specific types of technologies that we want to develop ourselves, which are very much tech-related.

Speaker Change: A technology from a very renown mathematical Institute in friends and on which we leverage to build out our multi modal offering and for example.

Speaker Change: Being able to make the partnership we have been talking about in the past with Astrazeneca and hopefully others.

Speaker Change: In lung and breast and prostate and colon cancer and then beyond that as in last example, as being MFC access right, which was a technology that was in that case developed by an academic center and we embedded within our platform. So to answer directly to your question. There are some specific.

Speaker Change: Type of technologies that we want to develop ourself, which are very much tech related. So this will be in particular, our micro services and our web interface and then the algorithms, but viewing that.

Ross Jordan Muken: So this will be, in particular, our microservices and our web interface, and then the algorithms. But beyond that, we're very eager to be able to accelerate our movement by acquiring potentially other companies that are enabling us to accelerate our journey in either a specific application or either in a specific market segment. So with that, Ross, I don't know if you want to give some more color regarding the debt financing.

Speaker Change: We're very eager to be able to accelerate our movement by acquiring potentially other companies that are enabling us to accelerate our journey in either a specific application or either in a specific market segment.

Speaker Change: So with that Ross I don't know who wants to give some more color regarding the <unk>.

Speaker Change: The debt financing.

Ross Jordan Muken: Yeah, so maybe just to sort of get at the, you know, tone of the question, I would say, first and foremost, we're obviously very focused on creating shareholder value and doing that in a way that is sustainable. And so, to that degree, you know, as we look at organic or inorganic initiatives, we're obviously in the current environment remaining very sensitive to dilution and certainly our cash burn and our path to profitability.

Ross: Yeah, So maybe just.

Speaker Change: Just to sort of get at also the Tony The question I would say first and foremost, we're obviously very focused on creating shareholder value and doing that in a way.

Speaker Change: That is sustainable and so to that degree as we look at organic or inorganic initiatives. We're obviously in the current environment remaining very sensitive to dilution.

Speaker Change: And certainly our cash burn and our path to profitability. So anything we do will have to be consistent with our plan and we're not going to deviate from the plan in terms of our our pathway to generating.

Ross Jordan Muken: So, anything we do will have to be consistent with our plan, and we're not going to deviate from the plan in terms of, you know, our pathway to generating cash flow in the business and becoming self-sustainable. So, that's a big, I would say, limiter or parameter.

Speaker Change: Generating cash flow in the business to becoming self sustainable. So that's a big I would say and limit our or parameter world. So obviously seeking high ROI.

Ross Jordan Muken: We're also obviously seeking high ROI transactions in the current environment, where you have quite a number of businesses, I would say, that are struggling with access to capital. You know, this is an environment for folks like us, particularly at the size of acquisition. We're going to look at that. Ultimately, I think we can create some pretty good value here for our shareholders within the construct of not changing our path to profitability. So, again, I think for us, you know, we're going to remain disciplined.

Speaker Change: The actions in the current environment we're in.

Speaker Change: You have quite a number of businesses that would say that are struggling with access to capital.

Speaker Change: This is the environment for folks like us, particularly at the size of acquisition, we're going to look at.

Speaker Change: That.

Speaker Change: Ultimately I think we can create some pretty good value here for our shareholders within the construct of not changing our path to profitability. So again I think for us.

Speaker Change: We're going to remain disciplined we're very happy with our current existing level of R&D investment in pipeline, but to <unk> point, if we're able to find strategic entities that will enhance our roadmap and speed our time to market in certain areas and or supplement our existing technologies to improve our customer.

Ross Jordan Muken: We're very happy with our current and existing level of R&D investment and pipeline. But to Jurgi's point, if we're able to find strategic entities that will enhance our roadmap and speed our time to market in certain areas and or supplement our existing technologies to improve our customer offering, we will consider them. But again, remaining incredibly financially disciplined.

Speaker Change: We will consider it but again remaining incredibly financially disciplined.

Speaker Change: Thank you for that color.

Speaker Change: Our next question comes from <unk>.

Daniel Gregory Brennan: Our next question comes from Dan Brennan from TD Talon. Please go ahead with your question. Hey, good morning. This is Kyle on for Dan.

Speaker Change:

Speaker Change: Comes from Dan Brennan from TV Cowen. Please go ahead with your question.

Speaker Change: Hey, Good morning. This is Kyle on for Dan.

Kyle Boucher: Jurgi, I hope you're feeling better. I had a clarifying question to start on the customer setups. You mentioned that some of them are taking a little bit longer than initially anticipated. Is that incremental to the comments you've sort of been giving, you know, over the last quarter or, you know, is this in line with how you think it's been for the past few months? Yes, thank you, Kyle. And yes, I do feel better.

Kyle: Hope your I hope you're feeling better.

Kyle: I had a clarifying question to start on.

Kyle: The customer set ups you mentioned that this is some of them are taking a little bit longer than initially anticipated is that incremental to the comments you've sort of been giving over the last quarter or if it's just in line with how youre thinking spend for the past few months.

Speaker Change: Yes, Thank you Kayla and yes, I do feel better.

Jurgi Camblong: So it's now we're it's in the same vein, I would say, as what we thought last quarter. Not going too much into the details, but the type of new applications like MSK access required to do proficiency testing with more sophisticated samples. And in the context of the new FDA regulation, this becomes even more important, right? So these are the type of things that are sometimes delaying the conversion. It's not like the technology is not ready. It's not like the platform is not easy to implement.

Kyle: So it's not in the in the same vein I would say is what we had thought last quarter.

Kyle: Not going too much into the details, but like the type of.

Kyle: New applications like <unk>, that's required to do approach since it testing with that.

Kyle: More sophisticated samples.

Kyle: And in the context of the new FDA regulation. This becomes even more important right. So these are the type of things that sometimes are delaying slate of conversion. It's not like the technology is not ready it's not like the platform is not easy to implement as more of that on the customer sides and they need to be taken a little bit more by hand, so that they can go through these proficiency.

Jurgi Camblong: It's more on the customer side, and they need to be taken a little bit more by hand so that they can go through this proficiency testing on a more smooth mode. Got it. And then, just on the volume side, can you speak to, you know, which, which, which applications are doing the best and the strongest right now out of your whole menu? Yes, so basically, I would say almost all applications are growing year on year.

Kyle: <unk> with the <unk>.

Kyle: On a more smooth.

Kyle: Good.

Speaker Change: Got it. Thank you and then just on the volume side can you speak to.

Kyle: Which which which applications are doing the best and the strongest right now.

Kyle: Out of your home menu.

Kyle: Yes, so basically.

Kyle: I'd say almost all applications are being growing year on year.

Jurgi Camblong: Maybe to start with the one that has grown the fastest still has been in solitude more HRV testing, which has grown a strong double digit. Overall, the solid tumor grew a strong double digit, and the EMONC as well. So basically, everything which is somatic-related is growing the fastest. Hereditary cancer has grown, but at a strong single-digit rate, while we expect this to grow further. As well, we do see, because of some market changes, consolidations that may benefit us as some of our customers may get access to more samples, and so basically increase the volume of utilization of SOFIA-DDM. And then, rare inherited disorders are weaker versus the others.

Kyle: Maybe to start with the one that's growing the fastest still being in solid tumor HIV testing, which has grown.

Kyle: Strong double digit.

Kyle: Overall, our solid tumor grew strong double digits and E bank as well, so basically everything which is somatic related is growing the fastest everyday every cancer has grown but strong single digit.

Kyle: While we expect this to grow further.

Kyle: As well, we do see because of some market changes consolidations that may benefit to us as some of our customers may get that system more samples and so basically increase the volume of 50 desertion Sofia begin and then Ryanair Ricky disorders, as being weaker versus the others and they would.

Jurgi Camblong: And I would say liquid biopsy is still early for us, right? So we don't yet know the volume of liquid biopsy given we just launched last week the MSK-ACCESS application. Despite that, this should be, I would say, the application family that will grow the quickest. First, as a reminder, we actually signed 13 total new customers recently on liquid biopsy. Nine specifically for MSK-ACCESS, including between Q4 2023 and Q1 2020 for bio-reference in the U.S., Tennessee Oncology in the U.S., Oncoelix in Canada, DASA in Brazil, Syndicate Bio in Nigeria, SOFIVA Genomics in Taiwan, Toulouse Oncopol in France, and Stravanger in Norway.

Kyle: Liquid biopsies.

Kyle: Already for US right. So we don't see yet the volume of liquid biopsy, given we just launched last week.

Kyle: <unk> application despite that this should be I would say the epic X.

Kyle: <unk> family that will grow the quick US first as a reminder, we signed actually 13 total new customers recently on liquid biopsy and nine.

Kyle: Specifically for MFC access, including between Q4, 2023% in Q1 2024.

Kyle: <unk> in the U S, Tennessee oncology in the U S on quality in Canada does that in Brazil. The syndicate Bayer in Nigeria, SAPHIRA genomics in Taiwan to lose Oncoprotein trends in <unk>, Norway, and our pipeline beyond these signings, which are not yet being implemented.

Jurgi Camblong: And our pipeline beyond these signings, which are not yet being implemented, Kyle in routine, has grown significantly and actually is a strong double digit million right now for liquid biopsy testing. I don't know if he wants to say anything else.

Kyle: <unk> routine.

Kyle: <unk> significantly and actually is a strong.

Kyle: Double digit $10 million right now for liquid biopsy testing.

Kyle: And then Russ if you want to say anything else.

Ross Jordan Muken: Yeah, maybe just to add, you know, Kyle, on top of even the volume growth, if I look at Q1 bookings, right, and we don't always talk about bookings, but I think it's relevant this quarter, just given the disconnect between the consumption we saw in the period versus the new business we saw coming online, which will benefit us later this year into 2025. It was incredibly balanced, both regionally as well as by application.

Russ: Yeah, maybe just to add on top of even the volume growth. If I look at Q1 bookings right and we don't always talk about bookings, but I think it's relevant this quarter just given the disconnect between the consumption. We saw in the period versus the new business, we saw coming online, which will benefit US later this year and into 25 it was.

Russ: <unk> balanced both regionally as well as by application. So if I look at contributions in the quarter. It was pretty consistent across the board, even including rare inherited and I would say from a pipeline basis as well if we look forward.

Ross Jordan Muken: So if I look at, you know, contributions in the quarter, they were pretty consistent across the board, even including rare and inherited. And I would say from a pipeline basis as well, if we look forward, obviously, Jurgi mentioned liquid biopsy, which is building considerably. But frankly, across the board, we're seeing very healthy pipeline build across all of our major application sets. So again, I think, you know, while in the period we saw some bumpiness, particularly in January, across the board from an application perspective, it's quite balanced and geographically balanced as well. Got it. Thank you.

Russ: Obviously, you had mentioned liquid biopsy, which is building considerably, but frankly across the board and we're seeing very healthy pipeline build.

Russ: Cross all of our major application set so again I think.

Russ: While in the period, we saw some lumpiness, particularly in January across the board from an application perspective, it's quite balanced and geographically balanced as well.

Speaker Change: Got it thank you.

Speaker Change: Once again, if you would like to ask a question. Please press star and one.

Jamie: Once again, if you would like to ask a question, please press star and 1. Our next question comes from Mark Massaro from BTIG. Please go ahead with your question. Hey guys, this is Vivian on behalf of Mark.

Speaker Change: Our next question comes from Mark Massaro from BTG. Please go ahead with your question.

Speaker Change: Hey, guys. This is Dan on for Mike Thanks for taking the question.

Mark Anthony Massaro: Thanks for taking the questions. I'm just curious, given that you called out, I think, a tougher macro for biopharma, how should we be thinking about that contribution throughout the year, either by revenue or in terms of customer count? And maybe just how we should be sizing that headwind?

Speaker Change: Okay.

Daniel Gregory Brennan: You called out I think a tougher macro for biopharma and how should we be thinking about that contribution tax a year and everybody rather than you are in terms of customer accounts and then maybe just how we should be fighting that headwind.

Speaker Change: Yes.

Speaker Change: Yes, Thank you Vivian so indeed.

Vidyun Bais: Thanks. Yes, thank you, Vidyun. So, indeed, one of the factors that we highlighted during our earnings was bioforma, and in particular large deals. So, I think, as has been highlighted by other companies in the space, definitely, you know, in bioforma, as well, they had to take some actions on cost control. And so, what we have experienced is that contracting can be elongated due to complex MSAs and so on.

Speaker Change: One of the factors SBA related doing our earnings was the Biopharma any particular large deals. So I think as it is being highlighted by other companies in the space.

Speaker Change: Can you give me.

Speaker Change: In the Biopharma as well the yet to take some actions on cost control.

Vivian: So what we experienced is that contracting can be elongated due to complex msas and so on.

Jurgi Camblong: So, I would say, despite that, on the data side, we have a pipeline that has been growing, you know, significantly over the last quarter. We see a catalyst beyond lung for the data offering with breast, where we announced the pilot with one of the bioforma companies we're working on. We announced new capabilities on kidney.

Vivian: So I would say despite that on or off based on the data side, we have the.

Vivian: The pipeline that has been growing.

Vivian: Significantly over the last.

Vivian: Parker.

Vivian: See catalyst.

Vivian: Beyond lung data offering with breast, where we announced the pilot with one of the Biopharma companies who are working on.

Vivian: We announced new capabilities on kidney as soon we will be at a school, where we expect to generate a quite high demand and then beyond the data aspect, which can be indeed in this category of complex deals with Biopharma that may require a complex msas and take longer given that they touch as well R&D dollars beyond commercial to alert.

Jurgi Camblong: Soon, we will be at ASCO, where we expect to generate quite high demand. And then, beyond the data aspects, which can be, indeed, in this category of complex deals with bioforma that may require complex MSAs and take longer, given that they touch, as well, R&D dollars beyond commercial dollars. We see MSK Access there, Vidyun, as a catalyst, as well, in particular for discovery efforts on the bioforma side. Just as a reminder, so I think liquid biopsy has become extremely important to bioforma in the development of their compounds.

Vivian: We see <unk> therapy yen as a catalyst as well.

Vivian: In particular for discovery efforts on the Biopharma side, just as a reminder, so I think liquid biopsy has become extremely important to the biopharma in the development of their compounds and the <unk> access technology that.

Jurgi Camblong: And the MSK Access technology that we implemented within Sophia DDM has proven to be superior to the others in the market, one of the reasons being that we are comparing two more normal samples, and we believe that this will create a lot of demand from the bioforma side, aside the budgeting constraints that I mentioned, which are more related to the data business. Ross, do you want to add anything?

Vivian: We implemented regions Sofia ADM has proven to be superior to the others in the market.

Vivian: One of the reason being that we are comparing to more normal samples and we believe that this will create a lot of demand from the biopharma side.

Vivian: E D.

Vivian: <unk>.

Vivian: Budgeting constraints that I mentioned, which are more related to the data business Russ do you want to add anything.

Ross Jordan Muken: Yeah, so I would just say, look, we had a very strong 23 in biopharma. So we knew we were coming into this year, particularly in the first part of the year, with a tough crop. I would say, you know, in general, that this remains a portion of our business, albeit small, that is quite volatile, right, and quite sizable, in terms of on a per contract basis. If we have things move around in the clinical business, you know, that could be 100k here or 200k there. In pharma, the deal sizes are much bigger.

Russ: So I would just say look we had a very strong 23 in biopharma. So we knew we were coming into this year, particularly in the first part of the year with a tough comp I would say in general right. This remains a portion of our business, albeit small that is quite volatile right and quite sizable in.

Russ: Terms of on a per contract basis, if we have things move around in the clinical business that could be 100, K here or 200 K. There you know in pharma. The deal sizes are much bigger so if you miss by a quarter or two of start time.

Ross Jordan Muken: So if you miss by a quarter or two a start time, you know, and the deal is in the million dollar plus range, it does affect your growth rates and your revenue cadence quite a bit. And so I would say, again, it's not totally unexpected, given the nascent stage of the business, but we're certainly, you know, monitoring it, and we're trying to mitigate it. And certainly, we're in a place where, you know, I think we are committed to our forecast for the year. But certainly, we do need some elements on the biopharma side to come through to hit that forecast.

Russ: And the deal is in the million plus range. It does move around your growth rates in your your revenue cadence quite a bit and so I would say again it's.

Vivian: Not totally unexpected given the nascent stage of the business, but we're certainly monitoring.

Vivian: Monitoring it we're trying to do actions to mitigate and certainly we're in a place where.

Vivian: I think we are committed to our forecast for the year, but certainly we do need some elements on the biopharma side to come through to hit that forecast.

Vivian: Yeah.

Vivian: Perfect, makes sense. And then just circling back to access, I was just curious, what does the early feedback look like on MSK access and sizing the pipeline there? And could you also remind us what the ASP profile of that offering looks like? Yes, so thank you very much, Vivian. So far, the reactions or the feedback are extremely positive about MSK Access. We hosted an event last week at our headquarters in Switzerland, where we had about 30 key opinion leaders coming from multiple institutions around the globe, plus some biopharma partners.

Speaker Change: Perfect. Thanks, guys.

Speaker Change: And then just going back to access them I'm just curious what the early feedback look like.

Speaker Change: Access.

Speaker Change: Just sizing the pipeline there and could you also remind us what the ASP profile.

Speaker Change: Mike.

Mike: Yes. So thank you very much <unk>. So the so far the reactions are the feedbacks are extremely positive on <unk> access.

Mike: Skied last week, an event within our headquarter in Switzerland, where we added about 30 key opinion leaders coming from municipal institutions around the globe.

Vivian: There have been initial data that are being presented by two of our customers, so one French and one German from Mark Institutions. And actually, the sensitivity and specificity so far are extremely high, Vivian. So I would say the number of samples that are being tested are still, you know, modest, but the sensitivity is really incredible.

Mike: Plus some biopharma partners.

Speaker Change: Initial data that are being presented by two of our customers. So one French and.

Speaker Change: German from marquee institutions, and actually the the sensitivity and specificity. So far are extremely high Vivian. So I would say the number of samples that have been tested are still modest but the sensitivity is really incredible emmis kid themselves are really being.

Jurgi Camblong: MSK themselves are really being bluffed and are helping us to advocate for the adoption of MSK Access in a decentralized way around the world, not only to serve patients but, as well, to accelerate, through testing, the recruitment of patients for clinical trials. And in that sense, I would say the fact that today, in the context of the partnership we have with MSK and AstraZeneca, we've been able, you know, in the pre-launch of this application, to sign nine customers on almost all continents around the world. It's a very, very strong sign of the quality of the application. When it comes to the ASP, it's significantly a much higher ASP because it's a solution that is more sophisticated.

Speaker Change: Blessed and are helping us to advocate for the adoption of <unk> access in a decentralized way around the world not only to serve patients.

Speaker Change: But as well to accelerate through testing the recruitment of patients for clinical trials and in that sense I would say the fact that today you're in the.

Speaker Change: The context of the partnership we have resumed skin astrazeneca, we are being able as you know.

Speaker Change: Prelaunch of this application to same nine customers in almost all the components around the world.

Speaker Change: Very very strong sign of the quality of the application when it come to the ESP.

Speaker Change: Significantly.

Speaker Change: Much higher ESP, because it's a solution that is.

Speaker Change: More sophisticated and so indirectly our average ISP will benefit as well from that as we were getting traction in UTD session, which is something we expect to happen again from Q3 Q4 of this year.

Speaker Change: Great. Thanks, very much for taking the question.

Jurgi Camblong: And so indirectly, our average ASP will benefit as well from that as we are getting traction and utilization, which is something we expect to happen again in Q3, Q4 of this year. Great, thanks so much for taking the question. Thank you, Vivian. And ladies and gentlemen, with that, showing no additional questions, we'll end today's question and answer session. I'd like to turn the floor back over to management for any closing.

Speaker Change: Thank you Vivian.

Speaker Change: And ladies and gentlemen, with that showing no additional questions. We'll end today's question and answer session I'd like to turn the floor back over to management for any closing remarks.

Jurgi Camblong: Yes, so thank you all for joining us today. Next week, we will be in New York on Tuesday at the RBC conference. To end, I would basically recap our Q1 performance. So we recognize that revenue was lighter than we had expected, but business momentum is really good, both on the pipeline and booking side. And something that we didn't highlight in the Q&A is that our cost performance and loss performance has significantly improved as well. And, as was said, we continue to be committed to sustainable growth and achieving our path to profitability in the next two plus years.

Speaker Change: Yes, so thank you all for joining us today.

Speaker Change: Last week, we will be on Tuesday in New York at the RBC Conference.

Speaker Change: And I would like to basically recap our Q1 performance. So we will recognize that revenue was later than what we had expected but business momentum is really good but on the pipeline and bookings side.

Speaker Change: Something that we Didnt dilate into Q&A is that our cost performance and loss performance has significantly improved as well and as will said, we continue to be committed to sustainable growth and reach our path to profitability in the next two plus years without thank you very much and have a good day.

Speaker Change: Ladies and gentlemen, with that we'll be concluding today's conference call and presentation. We do thank you for joining you may now disconnect your lines.

Jurgi Camblong: With that, thank you very much and have a good day. Ladies and gentlemen, with that, we'll be concluding today's conference call and presentation. We do thank you for joining. You may now disconnect your lines. Thank you. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

Speaker Change: Thank you.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].