SOPHiA GENETICS SA (NASDAQ:SOPH) Q4 2022 Earnings Call Transcript

And so, we allowed some of those accounts to churn. But again, they’re quite small, so nothing notable in there. And so, we feel quite good of where ultimately we shook out. 4%, still on the churn rate for a software business is incredibly impressive. And so, despite some of that noise, I’m still quite happy with the delivery. And we’re going to continue to balance this over time in regions where we see pricing that doesn’t make long term sense. As you can see, it’s very hard to sustain a profitable model if you continue to price at levels that are unsustainably low. And so, we’re not going to chase that. And I think we’ve looked at the competitive landscape and you know some of the businesses, and so that’s not a trap we’re going to fall into.

Tejas Savant: One final sort of big picture strategic question for you, Jurgi. We’ve had some internal disruptions at some of these CLIA labs. We’ve also had the situation where the cheapest sort of NGS costs are only accessible to the highest throughput settings. So there’s a strong incentive at play for consolidation of volumes at these large sort of facilities. How does that impact your go-to-market strategy here? And does the fact that vendors like Illumina are now focused on informatics onboard with their new instruments impact the value proposition for DDM?

Jurgi Camblong: First, to remind where we stand today, remember that our strategy is a land and expand model. We already 90 recurring customers of SOPHiA. In total, our network is 750 plus customers who already today are being equipped with sequencers, out of which 390 are using SOPHiA DDM every month. And those 750 and 390 using SOPHiA every month are already equipped with sequencers. And so, as you may remember, we worked significantly with the expand of our customers. And in the expand, we grow by adding more application, more menu to the utilization they made about SOPHiA. So, for example, moving from solid tumor to hereditary cancer, and then to liquid biopsy and then to . Today, only 50% of our 390 recurring platform customers are using one application at SOPHiA.

37% are using two or three application. And 13% are using only four or more applications. So, what I’m trying to tell you is that despite what you observe or what you have heard about, we already there in place and we can grow with these existing customers. But aside that, I would say that we don’t see the same dynamics actually suggest we see more and more decentralization. And I don’t know where you’ve got those messages. But in that context, we just signed Synergy, which is a reference lab in the US, we signed University of Arkansas, which is another academic center that we announced in our earnings today. So, this is a trend that we continue seeing. I was traveling last week in Colombia and Brazil. I can tell you that volumes are going up because sequencing is getting cheaper and cheaper, and will get cheaper and cheaper because of competition.

I was in a site where, actually, in Brazil, today, they have seven sequencers out of which four Illumina, two Thermo Fisher and 1 NGI. So I think we are ourselves in a very good position to be able to leverage on having more and more people adopting sequencers and having actually volumes higher end sequencing price cheaper is better for us, right? Because it means that people are going to produce more data; and by producing more data, it means they’re going to consume more of the SOPHiA DDM. So, we’re very encouraged with the current trends we see in the market.