NASDAQ:SOPH SOPHiA GENETICS Q1 2024 Earnings Report $0.76 -0.02 (-2.18%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$0.74 -0.02 (-2.23%) As of 04/17/2025 04:52 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Cue Biopharma EPS ResultsActual EPS-$0.21Consensus EPS -$0.25Beat/MissBeat by +$0.04One Year Ago EPSN/ACue Biopharma Revenue ResultsActual Revenue$15.78 millionExpected Revenue$16.80 millionBeat/MissMissed by -$1.02 millionYoY Revenue GrowthN/ACue Biopharma Announcement DetailsQuarterQ1 2024Date5/7/2024TimeN/AConference Call DateTuesday, May 7, 2024Conference Call Time8:00AM ETUpcoming EarningsKiniksa Pharmaceuticals' Q1 2025 earnings is scheduled for Tuesday, April 22, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Kiniksa Pharmaceuticals Q1 2024 Earnings Call TranscriptProvided by QuartrMay 7, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, everyone. My name is Jamie, and I'll be your conference operator today. After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded. At this time, I'd like to turn the floor over to Kellen Sanger, Sofia Genetics' Head of Strategy and Investor Relations. Operator00:00:45You may begin. Speaker 100:00:48Thank you, and good morning, everyone. Welcome to the Sofia Genetics' Q1 2024 earnings conference call. Joining me today to discuss our results are Doctor. Jurgen Kamblom, 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 meanings of federal securities laws. Speaker 100:01:11These 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. 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. During this call, we will present both IFRS and non IFRS financial measures. A reconciliation of IFRS to 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 Yergi. Speaker 200:01:50Thanks, Kaelin, 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 businesses. I will then turn the call over to Ross, who will provide a closer look at our Q1 financials and our outlook for 2024. 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 CAD 15,800,000 up 13 million in Q1 2023 and analysis volume was approximately CAD 84,000 up 9% from the prior year period. Speaker 200:02:37The lighter than expected start for the year can be attributed to 3 primary drivers. 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 EMEA, which can likely be attributed to exaggerated seasonal consumption trends. 2nd, and 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 begin implementing our platform. 3rd, the signing of 1 of our data projects in biopharma was unexpectedly delayed during the quarter as we are seeing some elongated sales cycles for larger deals. Speaker 200:03:39Let me take a moment to address each of these items. 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 early May. For example, volume in March reached approximately 30,000 analysis as compared to the approximately 84,000 analyses for the quarter. As a company that maintains close relationships with customers, conversations from the field further indicates that the change in consumption was temporal. Additionally, many customers also reconfirmed their volume assumptions for the full year, and we continue to monitor their usage closely. Speaker 200:04:24In 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 2nd consecutive quarter of strong new business growth as the 27 new logos signed in Q1 joined the 35 new logo signed in Q4 2023 to set up us nicely for a strong back half ramp for the year. 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 a 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. Speaker 200:05:32This team is well prepared to manage the existing influx of new customers we have experienced over the last two quarters. In Q1, we had 19 new customers enter 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 biopharma delays, we have developed an action plan to recover the revenue and capitalize on growing demand in biopharma during the back half 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 strong. Speaker 200:06:22We have taken actions to reduce setup times and accelerate new customers into routine usage. And last, we have a plan in place to make advance of the growing number of bio pharma opportunities we're seeing in the market. Given these factors, we remain confident in a strong back half ramp 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 cost well in the quarter as adjusted operating loss improved 13% year over year to EUR 14,100,000 as compared to EUR 16,200,000 in Q1 2023. 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 200:07:20We also continue to work closely with partners such as Microsoft and NVIDIA to manage gross margins, and our adjusted gross margins remained above 70% during the quarter despite the temporal 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 2 plus years with an acceptable level of cash cushion. As we progress in our path to profitability, revenue growth continues to be the primary driver towards this objective. At Sofia, 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 31, we had 4 63 core Genomics customers who have used Sofia DDM in the past 12 months to analyze cancers and rare diseases, up sequentially by 13 customers and up annually by 26 customers. Speaker 200:08:37Our focus will be 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 2023. 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, our market care team will be laser focused on reducing their time to routine so that they begin generating revenue faster. Speaker 200:09:31I will now take a moment to provide more detail on some of our major new land and expand achievements during Q1. And in doing so, we'll also touch upon 3 primary factors driving our growth in 2024: the U. S. Market, our world class solid tumor applications and our new liquid biopsy offering. 1st, we continue to see competing momentum in the U. Speaker 200:09:56S. Market. Analysis volume in the U. S. Grew 34% in Q1 when compared to the prior year period and revenue grew 27%. Speaker 200:10:07We 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 with adopting SofiaDDM's capabilities in oncology starting with inbound applications. Welcome Myo Clinic to the Sofia community. Beyond the U. Speaker 200:10:28S, we achieved major recent wins in the Asia Pacific market as well. In India, we continued our strong momentum from Q4 and signed a partnership with Strand Life Sciences in Bangalore, encompassing a broad based collaboration that aims to bring SofiaDDM's oncology applications to patients across the country. Strand is an established partner of biopharma companies in India, and we are excited to partner with them to improve patient health outcomes broadly. The addition of Strand, along with recently announced partners in India such as Carcinos and Tata, positions us very well in a country which is not only the most populated in the world, but also developing very quickly in terms of precision medicine. 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 Sofia DTM this month using our world class solid tumor application for HRD. Speaker 200:11:30With the addition of Samsung Medical Center, we now work directly with 4 of the top 5 oncology hospitals in the world. This list now includes Samsung, Mayo Clinic, Gustave Brosi and MSA. It's rewarding to see these leading healthcare institutions continue to recognize SofiaDDN's best in class analytical capabilities as well as the platform's ability to save customers' valuable time and resources. In LATAM, I'm excited to announce that in Mexico, we expanded our relationship with IMEHRAN, the Instituto Nacional de Medici Nacronomica, one of Mexico's national institutes and a top research center in the country. IMERCRAN, an existing customer of ours is now adopting hereditary cancer applications in addition to the solid tumor applications they already use. Speaker 200:12:26In Mechen estimates, these applications will be used to perform approximately 8,000 analyses per year. 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 short. Modest revenue growth in EMEA can be primarily attributed to exaggerated seasonal consumption trends in Italy, Spain and France as January had lower consumption levels than expected. Based on the recent trends and customer discussions, we expect revenue performance to return to previously expected growth levels as consumption picks up and new business won in Q4 and Q1 is onboarded over the course of the year. Speaker 200:13:23On 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 UK, I'm proud to announce today the signing of Cenovis, a London based lab providing services to the NHS, who will be adopting our new liquid biopsy application, MSK Access powered with Sofia DDM. Synovis provides lab services to SynLab as well as NHS institutions such as Guy's and St. Thomas and King's College Hospital. Further, they joined the Royal Mercant Hospital as yet another NHS related provider to recently adopt Sofia BDM. Speaker 200:14:07I'm excited to keep you updated on our progress with the NHS in the coming quarters. Speaking of major European Healthcare Institutions, I'm also proud of the recent announcement we made with Unilebs, one of the largest diagnostic labs in Europe, who went live on Sofia BDM in April. Unilebs, which conducts more than 221,000,000 tasks annually, is the latest of many central labs to have adopted Sofia Lithium's world class HRD application. Beyond the UK, I'm also excited to announce today that we deployed Sofia DDM in a resounding 3 new countries in EMEA during Q1. This includes Romania, Norway and our first customer in Africa in Nigeria. Speaker 200:14:54In Romania, Personal Genetics Romania, a major central lab located in Bucharest, a member of the largest private medical network in Romania, recently adopted Sofia Didiam world class solid tumor and in home applications. In Norway, Stavanger University Hospital, one of Norway's largest hospitals, adopted our new liquid biopsy application, MSK Access, powered with Sofia Lithia. And lastly, Syndicate Bio, a precision medicine lab in Nigeria that aims to provide cancer testing to the over 1,000,000 cancer patients in Africa each year also adopted MSK Access powered with Sofia Didion. Syndicate Bio joins the SofiaDDM 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 worldwide. Syndicate Bio marks the expansion decentralized model sustainably enables local institutions to support their patients' needs. Speaker 200:16:07The deployment of MSK Access powered with SofiaDDEM in Africa also represents a significant breakthrough on 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'm incredibly proud of this important step towards our mission. All of the progress I've spoken about today with respect to Sofia DTM's liquid biopsy applications and especially MSK access powered with SofiaDDM as being incredibly impressive and even more. So when you consider that the application's official commercial launch was only last week. For pre launch activities, a resounding line customers have already adopted MSK Access powered with Sofia DTM. Speaker 200:17:00These institutions include BioReference and Tennessee Oncology in the U. S, Oncoelix in Canada, Daza in Brazil, Syndicate Bio in Nigeria, Synovis in the UK, Stavanger University Hospital in Norway, Toulouse on Copole in France and Sofiva Genomics in Taiwan. Customers are attracted to MSCA Access powered with Sofia DDM for 3 primary reasons. First, the application leverages cumin and paper 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. 2nd, we deploy a tumor normal approach that removes biological false positives and enables customers to confidently identify relevant alterations while also saving them valuable time and resources. Speaker 200:17:55And 3rd, MSK Access powered with Sofia DDM 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 prop are resonating with customers and our liquid biopsy offering is driving significant demand in the market. Such demand was evident during the liquid biopsy launch event that we hosted at our offices last week in Rolle, Switzerland. The event included attendees from MSK, many friends 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 join us. Speaker 200:18:50We're excited to work together to expand access to world class cancer testing in liquid biopsy space. On that note, I want to highlight that the benefits of MSK access powered with Sofia BDM not only resonates 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 such by sponsoring the deployment of SofiaDDM 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 therapies. Speaker 200:19:38As announced previously, we recently entered a major collaboration with AstraZeneca to sponsor the deployment of SMS Care Access globally. The contract was finalized last month with a plan to sign numerous institutions across the globe to MSK ACCESS in 2024. MSK ACCESS powered with Sofia DTM offers a unique platform to accelerate drug deployment and development. For institutions signed as part of this collaboration, AstraZeneca will fund the setup programs and evidence generation activities. Apart from sponsor deployment of 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 Sofia Kerpath. Speaker 200:20:33In particular, our multimodal data offering provides biopharma companies with critical insights for their Phase II 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. Last quarter, I provided an update on a recent project with one of our biopharma partners where Sofia Karpat identified a signature in supopulations of lung cancer patients, which 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 needs. Beyond our learned capabilities, I'm excited to announce today that we recently signed our 1st breast cancer pilot. The project will follow a similar approach as taken for the lung project and will leverage Sofia Kerpath multimodal factory to identify novel multimodal biomarkers and advanced personalized treatment for Stage 4 hormone positive breast cancer patients. Speaker 200:21:45The collaboration will be a proof of concept for applying machine learning approaches to breast cancer patients and that such approaches can identify multimodal predictive signatures of response to therapy. More to come on this topic in the future. Beyond lung and breast, we recently expanded our multimodal offering to kidney cancer as well. In Q1, we announced a publication in Nature's Precision Oncology Journal of a multiyear study between us and the French Kidney Cancer Research Network, EUROCESSER, in which we analyzed 3,300 kidney patient cases. In doing so, we developed algorithms to predict post op outcomes and validate immuno oncology for those facing renal cell carcinoma. Speaker 200:22:35Going 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 this area. 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 and accelerate our growth through organic and or inorganic initiatives. We have therefore entered into an agreement with Perceptive Advisors for up to $50,000,000 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. Speaker 200:23:37And 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. Speaker 300:23:51Thank you, Yergi, and good morning, everyone. As Yirgi 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 Q1 of 2024 was 15 $800,000 compared to $14,000,000 for the Q1 of 2023, representing year over year growth of 13%. Constant currency revenue growth was 12%. Platform analysis volume was approximately 84,000 for the Q1 of 2024 compared to approximately 77,000 for the Q1 of 2023. Speaker 300:24:33Year 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. 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. Speaker 300:25:22As Jurgi mentioned, this year got off to a lighter start than expected. As a business that is extra sensitive to working days and weeks, January of 2024 had holidays which extended well into the 1st 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 was slightly longer than expected as we see more customers adopting new sequencers and more sophisticated applications. We currently believe this may add up to 3 months to set up timelines, meaning that we will likely see a larger impact from recent key wins in late 2024 and more notably in 2025. Speaker 300:26:04And last, we did see 1 bio pharma project unexpectedly become to blade as sales cycles appear to be elongating for larger deals. As we have noted prior, fluctuations in deal timing can have outsized impacts on our quarterly cadence of reported revenue. 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 May. In addition, many customers have also reconfirmed their volume assumptions for the full year despite the light start. Speaker 300:26:40Further, reaction 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. This trend leads us to believe that the usage of the platform should sustain at normalized 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. Speaker 300:27:15We also signed 27 new logos in Q1, adding to the 35 new customers we signed in Q4 20 23. Last, pipeline for the clinical business grew over 50% year over year in Q1 and the pipeline for the biopharma business more than doubled indicate a healthy and growing end market. Specifically, we are seeing interest around MSK access powered with Sofia DBM in both clinical and biopharma markets. This marks the 2nd 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. Moving on to an update on other key business metrics. Speaker 300:28:02Core 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. Annualized revenue churn rate was approximately 4.5% for Q1 2024, slightly higher than our expectations due to the loss of 1 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 percent in Q1 2023. Constant currency net dollar retention excluding COBRA related revenue was 122% as compared to 121% in Q1 2023. Gross profit for the Q1 of 2024 was $10,400,000 compared to gross profit of $9,700,000 in the Q1 of 2023, representing year over year growth of 7%. Speaker 300:29:05Gross margin was 65.9 percent for the Q1 of 2024 compared with 69.4% for the Q1 of 2023. Adjusted gross profit was $11,100,000 an improvement of 9.9% compared to adjusted gross profit of $10,100,000 for the first quarter of 2023. Adjusted gross margin was 70.5 percent for the Q1 of 2024 compared to 72.5% for Speaker 400:29:34the Q1 Speaker 300:29:34of 2023. Despite the modest software stream 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 recognize remainder of a one time benefit to computational storage related costs from our Microsoft partnership in the Q1 of 23, which previously benefited gross margins by about 180 basis points. Total operating expenses for the Q1 of 2024 were $29,200,000 compared to $29,000,000 for the Q1 of 2023. Across the functions, we continue to benefit from lower headcount on a year over year basis. Speaker 300:30:17Additionally, I remain pleased with our progress on the G and A side, where we also continue to benefit from lower professional service fees and the optimization of our public company costs. R and 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 $18,800,000 compared to $19,300,000 in the Q1 of 2023. Adjusted operating loss for the Q1 2024 was $14,100,000 compared to $16,200,000 for the Q1 of 2023. Speaker 300:30:59We continue to be pleased with our trajectory toward profitability and believe the additional headcount actions we took in the second half of twenty twenty three 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. Lastly, total cash burn for the Q1 of 2024 was $19,500,000 compared to $16,800,000 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 $3,000,000 Excluding this unfavorable FX impact, operating cash burn was down slightly year over year in Q1. We remain happy in cash utilization trend and are on track with respect to our medium term liquidity trajectory. Speaker 300:31:58Cash and cash equivalents were approximately $103,700,000 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 and 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. Therefore, Sofia Genetics is reaffirming our full year revenue guidance for 2024 of $78,000,000 to $81,000,000 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 3rd Q4. Speaker 300:32:54Additionally, 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. Additionally, we would note FX is weakened modestly from our original expectation, creating an incremental headwind in 2Q of a few 100 basis points. Following on our solid cost performance in Q1 2024, 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 $45,000,000 $50,000,000 loss. 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. Speaker 300:33:46This requires sustaining medium term revenue momentum at our previously communicated targeted levels while ensuring a reasonable timeframe to cash flow generation. To achieve this in 2024, we will continue to revisit our discretionary expenditures and execute and 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 2 plus years. Lastly, I'm pleased to share that we have recently entered into agreement with Perceptive Advisors for up to $50,000,000 in debt financing to provide additional capital flexibility to pursue our growth strategy. This may include both organic and inorganic growth efforts. Speaker 300:34:29As part of the agreement, we will be drawing $15,000,000 immediately with additional tranche of $35,000,000 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%. Under the terms of the agreement, Perceptiv 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. Speaker 300:35:29With that, I would like to turn the call back over to Yervi for the closing remarks before we take your questions. Speaker 200:35:38Thank you, Ross. While our performance this quarter was mixed, we remain quite optimistic about our path forward. Sofia's success stands 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 Sofia colleagues, partners, customers and investors for joining us in our journey. Without you, none of this would be possible. Speaker 200:36:04Please note, we are presenting at the RBC Healthcare Conference next Tuesday in New York City. I look forward to continuing to update you on Sofia's future success of democratizing data driven medicine. Operator, you may now open the line for questions. Operator00:36:22Ladies and gentlemen, the line is now open for questions. Our first question today comes from Connor McNamara from RBC Capital Markets. Please go ahead with your question. Speaker 400:37:00Hey guys, thanks for taking the questions. 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 ramp this year and your confidence in hitting full year guidance? How much is from trends you saw in March April with existing customers? Speaker 400:37:18And how much impact are you expecting from your new logo wins, which have been very strong in the last two quarters? Speaker 200:37:27Yes. Thank you, Conor. This is Georgi. So first, as you may remember, right, most of the revenue we do in a given year is with customers we have signed 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. Speaker 200:37:51So as we were highlighting in the call, in Q1 2024, we have signed 27 new logos and in Q4 2023, we have signed 35 new logos, right? And this compares to an historical average of 17 to 18 new logos per quarter. So we expect from one side that the well, the 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 analysis a month and that we saw this trend in April. So in terms of utilization, we're very confident that this will continue fuel our growth for the next quarters. Speaker 200:38:37Then we mentioned that the conversion from bookings to routine and utilization had been weaker than expected, although we knew that because of the new type of applications that are going to routine being more sophisticated or new sequences would take more time, but we have taken actions now and we have a full team of professional service that is executing the MAX curve. So we expect these delays not to be, if you like, extended. 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 type of applications like MSK Access is really highlighting that the 2nd part of the year will be strong in terms of utilization and hence revenue. Speaker 400:39:25Great. Thanks for that clarity, Yaroni. And then yes. Go ahead, Ross. Speaker 300:39:31No, I was just going to say and I would 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 forward utilization or forward analysis volume, that was running in the high 20s. And so I would say again, the exit velocity of the quarter was quite good. When we had originally guided, we had already contemplated in the guidance a relatively back half weighting to the revenue forecast. I would say excluding volume weakness in January, Q1 played out generally as we had expected. Obviously, that seasonal weakness we saw was pretty pronounced. Speaker 300:40:12And so again, I think with the exit velocity and the comments that Jyrdee 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, Jyrvi mentioned a number of other mitigation efforts. And so with that, we kept the guide. Speaker 400:40:35All right. Thanks for that clarity. Really helpful. And just one question on testing volume. Well, do you anticipate any impact of testing volumes as a result of the recently proposed LDT regulations by the FDA? Speaker 200:40:53Yes. Thank you, Conor. So obviously, that's something that we and many others are following up closely, right? At Sofia, we have been always striving 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 U. Speaker 200:41:12S. It was similar in Europe with IVDR. 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 U. S, which would be the first one impacted, right, 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 in terms of sample testing. Speaker 300:41:54And Connor, 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. Speaker 300:42:06Business 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. Speaker 400:42:35Great. Thanks guys and we'll see you next week. Speaker 300:42:39Thank you. Thank you very much. Operator00:42:43Our next question comes from Tayah Sivan from Morgan Stanley. Please go ahead with your question. Speaker 500:42:49Hello. This is Yuko on the call for Tejas. Thank you for taking our questions. For the lab setups that you undertaken that involve sequencing platforms from emerging vendors, You indicated they take approximately 3 months longer. Approximately, what proportion of new logos are incorporating emerging sequencing platforms? Speaker 500:43:09And do you expect this dynamic to be more pronounced in one region versus another? Speaker 200:43:16Yes. Good morning, Yuko, and very good question. I would say the sample on our data, right, today it's not yet big enough to give you precise numbers. But definitively, while Illumina sequencers are the dominating one, We see more people adopting other type of sequencing technologies and in particular, I would highlight MGI and Element. We hear as well a little bit more about PacBio recently. Speaker 200:43:47And in terms of regions, I would say that maybe the U. S. Is the one where as far as 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. That said, again, our view is that this will make probably 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. Speaker 500:44:20Great. Thank you for that color. And then a separate question, following the new debt providing up to $50,000,000 in financing, does M and A optionality come increasingly in focus for you? Could you remind us how you decide what to build in house versus to acquire? Speaker 200:44:39Yes. Thank you, Yoko. I will start and then let maybe Ross recap a bit the specificities of the financing we've announced with Perceptive. So typically at Sofia, we've been 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. Speaker 200:45:05Historically, we had acquired actually a company called Interactive Biosoftware who brought us a technology called Alamut ended up being a very successful add on module in our platform. This technology now is being used broadly across the globe and with very important names, a lot of marketing names in particular in the U. S. That are using that. We have known we had applied a similar strategy a couple of years ago as well when it comes to multi modality where we had acquired a technology from a very renowned mathematical institute in France and on which we leverage to build our multimodal offering and for example, being able to make the partnership we have been talking about in the past with AstraZeneca and hopefully others beyond lung, in breast and prostate and colon cancer. Speaker 200:46:01And then beyond that, as a last example, as being MSK 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 type of technologies that we want to develop our self, which are very much tech related. So, this will be in particular our microservices and our web interface and then the algorithms. But beyond that, we are 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 300:46:55Yes. So maybe just to sort of get at also the tone of the question, I would say, 1st 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, 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. 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 pathway to generating cash flow in the business and becoming self sustainable. Speaker 300:47:39So that's a big, I would say, limiter or parameter. We're also obviously seeking high ROI transactions. And in the current environment, where you have quite a number of businesses, I would say, that are struggling with access to capital, 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, we're going to remain disciplined. We're very happy with our current existing level of R and D investment and pipeline. Speaker 300:48:22But to Yirghi'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 it. But again, remaining incredibly financially disciplined. Speaker 500:48:43Thank you for that color. Operator00:48:48Our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question. Speaker 300:48:57Hey, good morning. This is Kyle on for Dan. Yerdi, hope you're feeling better. I had a clarifying question to start on the customer setups. You mentioned that this is some of them are taking a little bit longer than initially anticipated. Speaker 300:49:11Was that incremental to the comments you've sort of been giving over the last quarter or if it's just in line with how your thinking has been for the past few months? Speaker 200:49:23Yes. Thank you, Cael. And yes, I do feel better. So it's no, it's in the same vein, I would say, as what we had thought last quarter. Not going too much into the details, but like the type of new applications like MSK access require to do proficiency testing with more sophisticated samples. Speaker 200:49:47And 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, slightly the conversion. It's not like the technology is not ready. It's not like the platform is not easy to implement. It's more that 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 with a on a more smooth mode. Speaker 300:50:14Got it. Thank you. And then just on the volume side, can you speak to which applications are doing the best and the strongest right now out of your whole menu? Speaker 200:50:27Yes. So basically, I would say almost all applications are being growing year on year. Maybe to start with, the one that have grown the fastest still has been in solid tumor HRD testing, which has grown strong double digit. Overall, solid tumor grew strong double digit and Emonk as well. So basically everything which is somatic related is growing the fastest. Speaker 200:50:56Hereditary cancer has grown, but strong single digit. While we expect this to grow further as well, we do see because of some market changes consolidations that may benefit to us as some of our customers may get access to more samples and so basically increase the volume of utilization in Sofia DDM. And then, rare inherited disorders as being weaker versus the others. And I would say liquid biopsy is still early for us, right? So we don't see yet the volume of liquid biopsy, even we just launched last week the MSK access application. Speaker 200:51:35Despite that, this should be I would say the application that we grow the quickest. First, as a reminder, we signed actually 13 total new customers recently on liquid biopsy, 9 specifically for MSK access including between Q4 2023 and Q1 2020 for BioReference in the U. S, Tennessee Oncology in the U. S, Oncolytics in Canada, Daza in Brazil, Syndicate Bio in Nigeria, Sofiva Genomics in Taiwan, Toulouse Oncoccoly in France and Stravanger in Norway. And our pipeline beyond these signings, which are not yet being implemented, Kylie in routine, has grown significantly and actually is strong double digit in median right now for liquid biopsy testing. Speaker 200:52:28And then Ross, if he wants to say anything else? Speaker 300:52:31Yes. Maybe just to add, 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 and into 2025. It was incredibly 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 and inherited. And I would say from a pipeline basis as well, if we look forward, obviously, Jurgen mentioned liquid biopsy, which is building considerably. Speaker 300:53:12But frankly, across the board, we're seeing very healthy pipeline build across all of our major application sets. So again, I think, 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 Operator00:53:42Our next question comes from Mark Massaro from BTIG. Please go ahead with your question. Speaker 600:53:48Hey guys, this is Vivien on for Mark. Thanks for taking the questions. So just curious, do you have any color about, I think, the 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 600:54:08Thanks. Speaker 200:54:11Yes. Thank you, Vivian. So indeed, one of the factors that we highlighted during our earnings was the biopharma and in particular large deals. So I think as it has been highlighted by other companies in the space, definitively in the biopharma as well, they had to take some actions on post control. And so what we experienced is that contracting can be elongated due to complex MSAs and so on. Speaker 200:54:43So I would say despite that on our operational data side, we have a pipeline that has been growing significantly over the last quarter. We see a catalyst beyond lung on the data offering with breast where we announced a pilot with one of the biopharma companies we're working on. We announced new capabilities on kidney. Soon, we will be at ASCO where we expect to generate a quite high demand. And then beyond the data aspects, which can be indeed in this category of complex deals with biopharma that may require complex MSAs and take longer given that they touch as well R and D dollars beyond commercial dollars. Speaker 200:55:27We see MSK access Theravision as a catalyst as well, 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 MSK access technology that we implemented within Sofia DDM has proven to be superior to the others in the market. One of the reasons being that we are comparing 2 more normal samples and we believe that this will create a lot of demand from the biopharma side, aside the budgeting constraints that I mentioned, which are more related to the data business. Ross, Speaker 300:56:12would just say, look, we had a very strong 23 in biopharma. So we knew we were coming into this year, particularly in the 1st 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 terms of on the per contract basis. If we have things move around in the clinical business, that could be $100,000 here or $200,000 there. In pharma, the deal sizes are much bigger. Speaker 300:56:43So if you miss by a quarter or 2 a start time and the deal is in the $1,000,000 plus range, it does move around 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 monitoring it. We're trying to do actions to mitigate and certainly we're in a place where 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. Speaker 600:57:20Perfect. Makes sense. And then just circling back to access, I was just curious, what does the early feedback look like on MSK access and just sizing the pipeline there? And could you also remind us what the ASP profile of that offering looks like? Speaker 200:57:40Yes. So thank you very much, Vivian. So far the reactions are or the feedbacks are extremely positive on MSK Access. We hosted last week an event within our headquarter in Switzerland where we had about 30 key opinion leaders coming from multiple institutions around the globe plus some biopharma partners. There are being initial data that are being presented by 2 of our customers. Speaker 200:58:09So one French and one German from market institutions. And actually, the sensitivity and specificity so far are extremely high, Vivienne. So I would say the number of samples that are being tested are still modest, but the sensitivity is really incredible. MSK themselves are really being blocked 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 in pre launch of this application to sign 9 customers in almost all continents around the world. Speaker 200:59:05It'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. 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 from Q3, Q4 of this year. Speaker 600:59:34Great. Thanks so much for taking the questions. Speaker 200:59:38Thank you, Vivien. Operator00:59:42And 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. Speaker 200:59:54Yes. So thank you all for joining us today. Next week, we will be on Tuesday in New York at the RBC conference. To end, I would like to basically recap our Q1 performance. So, we recognize that revenue was lighter than what we had expected, but business momentum is really good both on the pipeline and bookings side. Speaker 201:00:15And something that we didn't highlight in the Q and A is that our cost performance and loss performance has significantly improved as well. And as Ross said, we continue to be committed to sustainable growth and reach our path to profitability in the next 2 plus years. With that, thank you very much and have a good day. Operator01:00:35Ladies 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.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallKiniksa Pharmaceuticals Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Cue Biopharma Earnings HeadlinesSophia Genetics, Precision for Medicine enter strategic partnershipApril 9, 2025 | markets.businessinsider.comPrecision for Medicine Partners with SOPHiA GENETICS to Expand Biopharma Services with the SOPHiA DDM™ Platform and its Liquid Biopsy CapabilitiesApril 8, 2025 | prnewswire.comBREAKING: Trump Bans NVIDIA Chips to ChinaOn April 16th, 2025, President Trump banned Nvidia from selling its most advanced semiconductors to China. That brings the U.S. and China closer to war than at any time since the Korean War ended in 1953.April 18, 2025 | Behind the Markets (Ad)Morgan Stanley Keeps Their Hold Rating on SOPHiA GENETICS (SOPH)March 20, 2025 | markets.businessinsider.comSOPHiA GENETICS (SOPH) Gets a Buy from BTIGMarch 18, 2025 | markets.businessinsider.comSOPHiA GENETICS Announces Two Million Patient Cases Analyzed, Marking a New Milestone for Data-Driven Medicine at NVIDIA GTCMarch 18, 2025 | prnewswire.comSee More SOPHiA GENETICS Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Cue Biopharma? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Cue Biopharma and other key companies, straight to your email. Email Address About Cue BiopharmaCue Biopharma (NASDAQ:CUE), a clinical-stage biopharmaceutical company, develops a novel class of injectable therapeutics to selectively engage and modulate targeted, disease relevant T cells directly within the patient's body. Its lead drug product candidate is CUE-101 for the treatment of human papilloma virus (HPV16+)-driven recurrent/metastatic head and neck cancer. The company is also developing CUE-102 targets Wilms' Tumor 1 protein in various cancers; CUE-103, a CUE-100 series drug product candidate; and Neo-STAT and RDI-STAT programs outside of oncology, including CUE-200, CUE-300, and CUE-400 series. It has collaboration agreements with LG Chem, Ltd. for the development of Immuno-STATs focused in the field of oncology; strategic collaboration and option agreement with Ono Pharmaceutical Co., Ltd. to advance CUE-401 for the treatment of autoimmune and inflammatory diseases; and license agreement with Albert Einstein College of Medicine. The company was formerly known as Imagen Biopharma, Inc. and changed its name to Cue Biopharma, Inc. in October 2016. Cue Biopharma, Inc. was incorporated in 2014 and is headquartered in Boston, Massachusetts.View Cue Biopharma ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 7 speakers on the call. Operator00:00:00Good day, everyone. My name is Jamie, and I'll be your conference operator today. After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded. At this time, I'd like to turn the floor over to Kellen Sanger, Sofia Genetics' Head of Strategy and Investor Relations. Operator00:00:45You may begin. Speaker 100:00:48Thank you, and good morning, everyone. Welcome to the Sofia Genetics' Q1 2024 earnings conference call. Joining me today to discuss our results are Doctor. Jurgen Kamblom, 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 meanings of federal securities laws. Speaker 100:01:11These 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. 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. During this call, we will present both IFRS and non IFRS financial measures. A reconciliation of IFRS to 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 Yergi. Speaker 200:01:50Thanks, Kaelin, 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 businesses. I will then turn the call over to Ross, who will provide a closer look at our Q1 financials and our outlook for 2024. 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 CAD 15,800,000 up 13 million in Q1 2023 and analysis volume was approximately CAD 84,000 up 9% from the prior year period. Speaker 200:02:37The lighter than expected start for the year can be attributed to 3 primary drivers. 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 EMEA, which can likely be attributed to exaggerated seasonal consumption trends. 2nd, and 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 begin implementing our platform. 3rd, the signing of 1 of our data projects in biopharma was unexpectedly delayed during the quarter as we are seeing some elongated sales cycles for larger deals. Speaker 200:03:39Let me take a moment to address each of these items. 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 early May. For example, volume in March reached approximately 30,000 analysis as compared to the approximately 84,000 analyses for the quarter. As a company that maintains close relationships with customers, conversations from the field further indicates that the change in consumption was temporal. Additionally, many customers also reconfirmed their volume assumptions for the full year, and we continue to monitor their usage closely. Speaker 200:04:24In 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 2nd consecutive quarter of strong new business growth as the 27 new logos signed in Q1 joined the 35 new logo signed in Q4 2023 to set up us nicely for a strong back half ramp for the year. 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 a 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. Speaker 200:05:32This team is well prepared to manage the existing influx of new customers we have experienced over the last two quarters. In Q1, we had 19 new customers enter 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 biopharma delays, we have developed an action plan to recover the revenue and capitalize on growing demand in biopharma during the back half 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 strong. Speaker 200:06:22We have taken actions to reduce setup times and accelerate new customers into routine usage. And last, we have a plan in place to make advance of the growing number of bio pharma opportunities we're seeing in the market. Given these factors, we remain confident in a strong back half ramp 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 cost well in the quarter as adjusted operating loss improved 13% year over year to EUR 14,100,000 as compared to EUR 16,200,000 in Q1 2023. 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 200:07:20We also continue to work closely with partners such as Microsoft and NVIDIA to manage gross margins, and our adjusted gross margins remained above 70% during the quarter despite the temporal 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 2 plus years with an acceptable level of cash cushion. As we progress in our path to profitability, revenue growth continues to be the primary driver towards this objective. At Sofia, 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 31, we had 4 63 core Genomics customers who have used Sofia DDM in the past 12 months to analyze cancers and rare diseases, up sequentially by 13 customers and up annually by 26 customers. Speaker 200:08:37Our focus will be 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 2023. 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, our market care team will be laser focused on reducing their time to routine so that they begin generating revenue faster. Speaker 200:09:31I will now take a moment to provide more detail on some of our major new land and expand achievements during Q1. And in doing so, we'll also touch upon 3 primary factors driving our growth in 2024: the U. S. Market, our world class solid tumor applications and our new liquid biopsy offering. 1st, we continue to see competing momentum in the U. Speaker 200:09:56S. Market. Analysis volume in the U. S. Grew 34% in Q1 when compared to the prior year period and revenue grew 27%. Speaker 200:10:07We 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 with adopting SofiaDDM's capabilities in oncology starting with inbound applications. Welcome Myo Clinic to the Sofia community. Beyond the U. Speaker 200:10:28S, we achieved major recent wins in the Asia Pacific market as well. In India, we continued our strong momentum from Q4 and signed a partnership with Strand Life Sciences in Bangalore, encompassing a broad based collaboration that aims to bring SofiaDDM's oncology applications to patients across the country. Strand is an established partner of biopharma companies in India, and we are excited to partner with them to improve patient health outcomes broadly. The addition of Strand, along with recently announced partners in India such as Carcinos and Tata, positions us very well in a country which is not only the most populated in the world, but also developing very quickly in terms of precision medicine. 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 Sofia DTM this month using our world class solid tumor application for HRD. Speaker 200:11:30With the addition of Samsung Medical Center, we now work directly with 4 of the top 5 oncology hospitals in the world. This list now includes Samsung, Mayo Clinic, Gustave Brosi and MSA. It's rewarding to see these leading healthcare institutions continue to recognize SofiaDDN's best in class analytical capabilities as well as the platform's ability to save customers' valuable time and resources. In LATAM, I'm excited to announce that in Mexico, we expanded our relationship with IMEHRAN, the Instituto Nacional de Medici Nacronomica, one of Mexico's national institutes and a top research center in the country. IMERCRAN, an existing customer of ours is now adopting hereditary cancer applications in addition to the solid tumor applications they already use. Speaker 200:12:26In Mechen estimates, these applications will be used to perform approximately 8,000 analyses per year. 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 short. Modest revenue growth in EMEA can be primarily attributed to exaggerated seasonal consumption trends in Italy, Spain and France as January had lower consumption levels than expected. Based on the recent trends and customer discussions, we expect revenue performance to return to previously expected growth levels as consumption picks up and new business won in Q4 and Q1 is onboarded over the course of the year. Speaker 200:13:23On 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 UK, I'm proud to announce today the signing of Cenovis, a London based lab providing services to the NHS, who will be adopting our new liquid biopsy application, MSK Access powered with Sofia DDM. Synovis provides lab services to SynLab as well as NHS institutions such as Guy's and St. Thomas and King's College Hospital. Further, they joined the Royal Mercant Hospital as yet another NHS related provider to recently adopt Sofia BDM. Speaker 200:14:07I'm excited to keep you updated on our progress with the NHS in the coming quarters. Speaking of major European Healthcare Institutions, I'm also proud of the recent announcement we made with Unilebs, one of the largest diagnostic labs in Europe, who went live on Sofia BDM in April. Unilebs, which conducts more than 221,000,000 tasks annually, is the latest of many central labs to have adopted Sofia Lithium's world class HRD application. Beyond the UK, I'm also excited to announce today that we deployed Sofia DDM in a resounding 3 new countries in EMEA during Q1. This includes Romania, Norway and our first customer in Africa in Nigeria. Speaker 200:14:54In Romania, Personal Genetics Romania, a major central lab located in Bucharest, a member of the largest private medical network in Romania, recently adopted Sofia Didiam world class solid tumor and in home applications. In Norway, Stavanger University Hospital, one of Norway's largest hospitals, adopted our new liquid biopsy application, MSK Access, powered with Sofia Lithia. And lastly, Syndicate Bio, a precision medicine lab in Nigeria that aims to provide cancer testing to the over 1,000,000 cancer patients in Africa each year also adopted MSK Access powered with Sofia Didion. Syndicate Bio joins the SofiaDDM 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 worldwide. Syndicate Bio marks the expansion decentralized model sustainably enables local institutions to support their patients' needs. Speaker 200:16:07The deployment of MSK Access powered with SofiaDDEM in Africa also represents a significant breakthrough on 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'm incredibly proud of this important step towards our mission. All of the progress I've spoken about today with respect to Sofia DTM's liquid biopsy applications and especially MSK access powered with SofiaDDM as being incredibly impressive and even more. So when you consider that the application's official commercial launch was only last week. For pre launch activities, a resounding line customers have already adopted MSK Access powered with Sofia DTM. Speaker 200:17:00These institutions include BioReference and Tennessee Oncology in the U. S, Oncoelix in Canada, Daza in Brazil, Syndicate Bio in Nigeria, Synovis in the UK, Stavanger University Hospital in Norway, Toulouse on Copole in France and Sofiva Genomics in Taiwan. Customers are attracted to MSCA Access powered with Sofia DDM for 3 primary reasons. First, the application leverages cumin and paper 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. 2nd, we deploy a tumor normal approach that removes biological false positives and enables customers to confidently identify relevant alterations while also saving them valuable time and resources. Speaker 200:17:55And 3rd, MSK Access powered with Sofia DDM 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 prop are resonating with customers and our liquid biopsy offering is driving significant demand in the market. Such demand was evident during the liquid biopsy launch event that we hosted at our offices last week in Rolle, Switzerland. The event included attendees from MSK, many friends 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 join us. Speaker 200:18:50We're excited to work together to expand access to world class cancer testing in liquid biopsy space. On that note, I want to highlight that the benefits of MSK access powered with Sofia BDM not only resonates 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 such by sponsoring the deployment of SofiaDDM 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 therapies. Speaker 200:19:38As announced previously, we recently entered a major collaboration with AstraZeneca to sponsor the deployment of SMS Care Access globally. The contract was finalized last month with a plan to sign numerous institutions across the globe to MSK ACCESS in 2024. MSK ACCESS powered with Sofia DTM offers a unique platform to accelerate drug deployment and development. For institutions signed as part of this collaboration, AstraZeneca will fund the setup programs and evidence generation activities. Apart from sponsor deployment of 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 Sofia Kerpath. Speaker 200:20:33In particular, our multimodal data offering provides biopharma companies with critical insights for their Phase II 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. Last quarter, I provided an update on a recent project with one of our biopharma partners where Sofia Karpat identified a signature in supopulations of lung cancer patients, which 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 needs. Beyond our learned capabilities, I'm excited to announce today that we recently signed our 1st breast cancer pilot. The project will follow a similar approach as taken for the lung project and will leverage Sofia Kerpath multimodal factory to identify novel multimodal biomarkers and advanced personalized treatment for Stage 4 hormone positive breast cancer patients. Speaker 200:21:45The collaboration will be a proof of concept for applying machine learning approaches to breast cancer patients and that such approaches can identify multimodal predictive signatures of response to therapy. More to come on this topic in the future. Beyond lung and breast, we recently expanded our multimodal offering to kidney cancer as well. In Q1, we announced a publication in Nature's Precision Oncology Journal of a multiyear study between us and the French Kidney Cancer Research Network, EUROCESSER, in which we analyzed 3,300 kidney patient cases. In doing so, we developed algorithms to predict post op outcomes and validate immuno oncology for those facing renal cell carcinoma. Speaker 200:22:35Going 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 this area. 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 and accelerate our growth through organic and or inorganic initiatives. We have therefore entered into an agreement with Perceptive Advisors for up to $50,000,000 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. Speaker 200:23:37And 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. Speaker 300:23:51Thank you, Yergi, and good morning, everyone. As Yirgi 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 Q1 of 2024 was 15 $800,000 compared to $14,000,000 for the Q1 of 2023, representing year over year growth of 13%. Constant currency revenue growth was 12%. Platform analysis volume was approximately 84,000 for the Q1 of 2024 compared to approximately 77,000 for the Q1 of 2023. Speaker 300:24:33Year 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. 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. Speaker 300:25:22As Jurgi mentioned, this year got off to a lighter start than expected. As a business that is extra sensitive to working days and weeks, January of 2024 had holidays which extended well into the 1st 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 was slightly longer than expected as we see more customers adopting new sequencers and more sophisticated applications. We currently believe this may add up to 3 months to set up timelines, meaning that we will likely see a larger impact from recent key wins in late 2024 and more notably in 2025. Speaker 300:26:04And last, we did see 1 bio pharma project unexpectedly become to blade as sales cycles appear to be elongating for larger deals. As we have noted prior, fluctuations in deal timing can have outsized impacts on our quarterly cadence of reported revenue. 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 May. In addition, many customers have also reconfirmed their volume assumptions for the full year despite the light start. Speaker 300:26:40Further, reaction 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. This trend leads us to believe that the usage of the platform should sustain at normalized 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. Speaker 300:27:15We also signed 27 new logos in Q1, adding to the 35 new customers we signed in Q4 20 23. Last, pipeline for the clinical business grew over 50% year over year in Q1 and the pipeline for the biopharma business more than doubled indicate a healthy and growing end market. Specifically, we are seeing interest around MSK access powered with Sofia DBM in both clinical and biopharma markets. This marks the 2nd 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. Moving on to an update on other key business metrics. Speaker 300:28:02Core 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. Annualized revenue churn rate was approximately 4.5% for Q1 2024, slightly higher than our expectations due to the loss of 1 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 percent in Q1 2023. Constant currency net dollar retention excluding COBRA related revenue was 122% as compared to 121% in Q1 2023. Gross profit for the Q1 of 2024 was $10,400,000 compared to gross profit of $9,700,000 in the Q1 of 2023, representing year over year growth of 7%. Speaker 300:29:05Gross margin was 65.9 percent for the Q1 of 2024 compared with 69.4% for the Q1 of 2023. Adjusted gross profit was $11,100,000 an improvement of 9.9% compared to adjusted gross profit of $10,100,000 for the first quarter of 2023. Adjusted gross margin was 70.5 percent for the Q1 of 2024 compared to 72.5% for Speaker 400:29:34the Q1 Speaker 300:29:34of 2023. Despite the modest software stream 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 recognize remainder of a one time benefit to computational storage related costs from our Microsoft partnership in the Q1 of 23, which previously benefited gross margins by about 180 basis points. Total operating expenses for the Q1 of 2024 were $29,200,000 compared to $29,000,000 for the Q1 of 2023. Across the functions, we continue to benefit from lower headcount on a year over year basis. Speaker 300:30:17Additionally, I remain pleased with our progress on the G and A side, where we also continue to benefit from lower professional service fees and the optimization of our public company costs. R and 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 $18,800,000 compared to $19,300,000 in the Q1 of 2023. Adjusted operating loss for the Q1 2024 was $14,100,000 compared to $16,200,000 for the Q1 of 2023. Speaker 300:30:59We continue to be pleased with our trajectory toward profitability and believe the additional headcount actions we took in the second half of twenty twenty three 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. Lastly, total cash burn for the Q1 of 2024 was $19,500,000 compared to $16,800,000 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 $3,000,000 Excluding this unfavorable FX impact, operating cash burn was down slightly year over year in Q1. We remain happy in cash utilization trend and are on track with respect to our medium term liquidity trajectory. Speaker 300:31:58Cash and cash equivalents were approximately $103,700,000 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 and 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. Therefore, Sofia Genetics is reaffirming our full year revenue guidance for 2024 of $78,000,000 to $81,000,000 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 3rd Q4. Speaker 300:32:54Additionally, 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. Additionally, we would note FX is weakened modestly from our original expectation, creating an incremental headwind in 2Q of a few 100 basis points. Following on our solid cost performance in Q1 2024, 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 $45,000,000 $50,000,000 loss. 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. Speaker 300:33:46This requires sustaining medium term revenue momentum at our previously communicated targeted levels while ensuring a reasonable timeframe to cash flow generation. To achieve this in 2024, we will continue to revisit our discretionary expenditures and execute and 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 2 plus years. Lastly, I'm pleased to share that we have recently entered into agreement with Perceptive Advisors for up to $50,000,000 in debt financing to provide additional capital flexibility to pursue our growth strategy. This may include both organic and inorganic growth efforts. Speaker 300:34:29As part of the agreement, we will be drawing $15,000,000 immediately with additional tranche of $35,000,000 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%. Under the terms of the agreement, Perceptiv 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. Speaker 300:35:29With that, I would like to turn the call back over to Yervi for the closing remarks before we take your questions. Speaker 200:35:38Thank you, Ross. While our performance this quarter was mixed, we remain quite optimistic about our path forward. Sofia's success stands 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 Sofia colleagues, partners, customers and investors for joining us in our journey. Without you, none of this would be possible. Speaker 200:36:04Please note, we are presenting at the RBC Healthcare Conference next Tuesday in New York City. I look forward to continuing to update you on Sofia's future success of democratizing data driven medicine. Operator, you may now open the line for questions. Operator00:36:22Ladies and gentlemen, the line is now open for questions. Our first question today comes from Connor McNamara from RBC Capital Markets. Please go ahead with your question. Speaker 400:37:00Hey guys, thanks for taking the questions. 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 ramp this year and your confidence in hitting full year guidance? How much is from trends you saw in March April with existing customers? Speaker 400:37:18And how much impact are you expecting from your new logo wins, which have been very strong in the last two quarters? Speaker 200:37:27Yes. Thank you, Conor. This is Georgi. So first, as you may remember, right, most of the revenue we do in a given year is with customers we have signed 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. Speaker 200:37:51So as we were highlighting in the call, in Q1 2024, we have signed 27 new logos and in Q4 2023, we have signed 35 new logos, right? And this compares to an historical average of 17 to 18 new logos per quarter. So we expect from one side that the well, the 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 analysis a month and that we saw this trend in April. So in terms of utilization, we're very confident that this will continue fuel our growth for the next quarters. Speaker 200:38:37Then we mentioned that the conversion from bookings to routine and utilization had been weaker than expected, although we knew that because of the new type of applications that are going to routine being more sophisticated or new sequences would take more time, but we have taken actions now and we have a full team of professional service that is executing the MAX curve. So we expect these delays not to be, if you like, extended. 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 type of applications like MSK Access is really highlighting that the 2nd part of the year will be strong in terms of utilization and hence revenue. Speaker 400:39:25Great. Thanks for that clarity, Yaroni. And then yes. Go ahead, Ross. Speaker 300:39:31No, I was just going to say and I would 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 forward utilization or forward analysis volume, that was running in the high 20s. And so I would say again, the exit velocity of the quarter was quite good. When we had originally guided, we had already contemplated in the guidance a relatively back half weighting to the revenue forecast. I would say excluding volume weakness in January, Q1 played out generally as we had expected. Obviously, that seasonal weakness we saw was pretty pronounced. Speaker 300:40:12And so again, I think with the exit velocity and the comments that Jyrdee 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, Jyrvi mentioned a number of other mitigation efforts. And so with that, we kept the guide. Speaker 400:40:35All right. Thanks for that clarity. Really helpful. And just one question on testing volume. Well, do you anticipate any impact of testing volumes as a result of the recently proposed LDT regulations by the FDA? Speaker 200:40:53Yes. Thank you, Conor. So obviously, that's something that we and many others are following up closely, right? At Sofia, we have been always striving 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 U. Speaker 200:41:12S. It was similar in Europe with IVDR. 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 U. S, which would be the first one impacted, right, 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 in terms of sample testing. Speaker 300:41:54And Connor, 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. Speaker 300:42:06Business 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. Speaker 400:42:35Great. Thanks guys and we'll see you next week. Speaker 300:42:39Thank you. Thank you very much. Operator00:42:43Our next question comes from Tayah Sivan from Morgan Stanley. Please go ahead with your question. Speaker 500:42:49Hello. This is Yuko on the call for Tejas. Thank you for taking our questions. For the lab setups that you undertaken that involve sequencing platforms from emerging vendors, You indicated they take approximately 3 months longer. Approximately, what proportion of new logos are incorporating emerging sequencing platforms? Speaker 500:43:09And do you expect this dynamic to be more pronounced in one region versus another? Speaker 200:43:16Yes. Good morning, Yuko, and very good question. I would say the sample on our data, right, today it's not yet big enough to give you precise numbers. But definitively, while Illumina sequencers are the dominating one, We see more people adopting other type of sequencing technologies and in particular, I would highlight MGI and Element. We hear as well a little bit more about PacBio recently. Speaker 200:43:47And in terms of regions, I would say that maybe the U. S. Is the one where as far as 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. That said, again, our view is that this will make probably 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. Speaker 500:44:20Great. Thank you for that color. And then a separate question, following the new debt providing up to $50,000,000 in financing, does M and A optionality come increasingly in focus for you? Could you remind us how you decide what to build in house versus to acquire? Speaker 200:44:39Yes. Thank you, Yoko. I will start and then let maybe Ross recap a bit the specificities of the financing we've announced with Perceptive. So typically at Sofia, we've been 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. Speaker 200:45:05Historically, we had acquired actually a company called Interactive Biosoftware who brought us a technology called Alamut ended up being a very successful add on module in our platform. This technology now is being used broadly across the globe and with very important names, a lot of marketing names in particular in the U. S. That are using that. We have known we had applied a similar strategy a couple of years ago as well when it comes to multi modality where we had acquired a technology from a very renowned mathematical institute in France and on which we leverage to build our multimodal offering and for example, being able to make the partnership we have been talking about in the past with AstraZeneca and hopefully others beyond lung, in breast and prostate and colon cancer. Speaker 200:46:01And then beyond that, as a last example, as being MSK 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 type of technologies that we want to develop our self, which are very much tech related. So, this will be in particular our microservices and our web interface and then the algorithms. But beyond that, we are 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 300:46:55Yes. So maybe just to sort of get at also the tone of the question, I would say, 1st 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, 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. 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 pathway to generating cash flow in the business and becoming self sustainable. Speaker 300:47:39So that's a big, I would say, limiter or parameter. We're also obviously seeking high ROI transactions. And in the current environment, where you have quite a number of businesses, I would say, that are struggling with access to capital, 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, we're going to remain disciplined. We're very happy with our current existing level of R and D investment and pipeline. Speaker 300:48:22But to Yirghi'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 it. But again, remaining incredibly financially disciplined. Speaker 500:48:43Thank you for that color. Operator00:48:48Our next question comes from Dan Brennan from TD Cowen. Please go ahead with your question. Speaker 300:48:57Hey, good morning. This is Kyle on for Dan. Yerdi, hope you're feeling better. I had a clarifying question to start on the customer setups. You mentioned that this is some of them are taking a little bit longer than initially anticipated. Speaker 300:49:11Was that incremental to the comments you've sort of been giving over the last quarter or if it's just in line with how your thinking has been for the past few months? Speaker 200:49:23Yes. Thank you, Cael. And yes, I do feel better. So it's no, it's in the same vein, I would say, as what we had thought last quarter. Not going too much into the details, but like the type of new applications like MSK access require to do proficiency testing with more sophisticated samples. Speaker 200:49:47And 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, slightly the conversion. It's not like the technology is not ready. It's not like the platform is not easy to implement. It's more that 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 with a on a more smooth mode. Speaker 300:50:14Got it. Thank you. And then just on the volume side, can you speak to which applications are doing the best and the strongest right now out of your whole menu? Speaker 200:50:27Yes. So basically, I would say almost all applications are being growing year on year. Maybe to start with, the one that have grown the fastest still has been in solid tumor HRD testing, which has grown strong double digit. Overall, solid tumor grew strong double digit and Emonk as well. So basically everything which is somatic related is growing the fastest. Speaker 200:50:56Hereditary cancer has grown, but strong single digit. While we expect this to grow further as well, we do see because of some market changes consolidations that may benefit to us as some of our customers may get access to more samples and so basically increase the volume of utilization in Sofia DDM. And then, rare inherited disorders as being weaker versus the others. And I would say liquid biopsy is still early for us, right? So we don't see yet the volume of liquid biopsy, even we just launched last week the MSK access application. Speaker 200:51:35Despite that, this should be I would say the application that we grow the quickest. First, as a reminder, we signed actually 13 total new customers recently on liquid biopsy, 9 specifically for MSK access including between Q4 2023 and Q1 2020 for BioReference in the U. S, Tennessee Oncology in the U. S, Oncolytics in Canada, Daza in Brazil, Syndicate Bio in Nigeria, Sofiva Genomics in Taiwan, Toulouse Oncoccoly in France and Stravanger in Norway. And our pipeline beyond these signings, which are not yet being implemented, Kylie in routine, has grown significantly and actually is strong double digit in median right now for liquid biopsy testing. Speaker 200:52:28And then Ross, if he wants to say anything else? Speaker 300:52:31Yes. Maybe just to add, 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 and into 2025. It was incredibly 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 and inherited. And I would say from a pipeline basis as well, if we look forward, obviously, Jurgen mentioned liquid biopsy, which is building considerably. Speaker 300:53:12But frankly, across the board, we're seeing very healthy pipeline build across all of our major application sets. So again, I think, 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 Operator00:53:42Our next question comes from Mark Massaro from BTIG. Please go ahead with your question. Speaker 600:53:48Hey guys, this is Vivien on for Mark. Thanks for taking the questions. So just curious, do you have any color about, I think, the 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 600:54:08Thanks. Speaker 200:54:11Yes. Thank you, Vivian. So indeed, one of the factors that we highlighted during our earnings was the biopharma and in particular large deals. So I think as it has been highlighted by other companies in the space, definitively in the biopharma as well, they had to take some actions on post control. And so what we experienced is that contracting can be elongated due to complex MSAs and so on. Speaker 200:54:43So I would say despite that on our operational data side, we have a pipeline that has been growing significantly over the last quarter. We see a catalyst beyond lung on the data offering with breast where we announced a pilot with one of the biopharma companies we're working on. We announced new capabilities on kidney. Soon, we will be at ASCO where we expect to generate a quite high demand. And then beyond the data aspects, which can be indeed in this category of complex deals with biopharma that may require complex MSAs and take longer given that they touch as well R and D dollars beyond commercial dollars. Speaker 200:55:27We see MSK access Theravision as a catalyst as well, 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 MSK access technology that we implemented within Sofia DDM has proven to be superior to the others in the market. One of the reasons being that we are comparing 2 more normal samples and we believe that this will create a lot of demand from the biopharma side, aside the budgeting constraints that I mentioned, which are more related to the data business. Ross, Speaker 300:56:12would just say, look, we had a very strong 23 in biopharma. So we knew we were coming into this year, particularly in the 1st 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 terms of on the per contract basis. If we have things move around in the clinical business, that could be $100,000 here or $200,000 there. In pharma, the deal sizes are much bigger. Speaker 300:56:43So if you miss by a quarter or 2 a start time and the deal is in the $1,000,000 plus range, it does move around 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 monitoring it. We're trying to do actions to mitigate and certainly we're in a place where 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. Speaker 600:57:20Perfect. Makes sense. And then just circling back to access, I was just curious, what does the early feedback look like on MSK access and just sizing the pipeline there? And could you also remind us what the ASP profile of that offering looks like? Speaker 200:57:40Yes. So thank you very much, Vivian. So far the reactions are or the feedbacks are extremely positive on MSK Access. We hosted last week an event within our headquarter in Switzerland where we had about 30 key opinion leaders coming from multiple institutions around the globe plus some biopharma partners. There are being initial data that are being presented by 2 of our customers. Speaker 200:58:09So one French and one German from market institutions. And actually, the sensitivity and specificity so far are extremely high, Vivienne. So I would say the number of samples that are being tested are still modest, but the sensitivity is really incredible. MSK themselves are really being blocked 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 in pre launch of this application to sign 9 customers in almost all continents around the world. Speaker 200:59:05It'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. 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 from Q3, Q4 of this year. Speaker 600:59:34Great. Thanks so much for taking the questions. Speaker 200:59:38Thank you, Vivien. Operator00:59:42And 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. Speaker 200:59:54Yes. So thank you all for joining us today. Next week, we will be on Tuesday in New York at the RBC conference. To end, I would like to basically recap our Q1 performance. So, we recognize that revenue was lighter than what we had expected, but business momentum is really good both on the pipeline and bookings side. Speaker 201:00:15And something that we didn't highlight in the Q and A is that our cost performance and loss performance has significantly improved as well. And as Ross said, we continue to be committed to sustainable growth and reach our path to profitability in the next 2 plus years. With that, thank you very much and have a good day. Operator01:00:35Ladies 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.Read morePowered by