Sophia Genetics (SOPH) Q3 2025: 180% Jump in Large Deal Value Signals Pipeline Inflection
Sophia Genetics delivered a third straight quarter of accelerating revenue growth, propelled by a record wave of large customer signings and expanding global demand for its AI-driven genomics platform. The company’s pivot to larger accounts and high-value applications like liquid biopsy is reshaping its revenue mix and pipeline, while cost discipline and platform efficiency are holding margins steady despite surging data volumes. With biopharma headwinds now reversing and a robust backlog, Sophia enters 2026 with heightened visibility and a multi-year growth runway.
Summary
- Large Account Focus Drives Pipeline Shift: Average contract value soared 180%, reflecting a decisive move upmarket.
- Liquid Biopsy and AI Expand TAM: MSK Access and Digital Twins are unlocking new clinical and pharma use cases.
- Biopharma Recovery Adds Tailwind: Recent wins and a swelling pipeline set the stage for multi-year expansion.
Performance Analysis
Sophia Genetics posted 23% year-over-year revenue growth in Q3, marking its third consecutive quarter of accelerating top-line expansion. This performance is anchored in a strategic shift toward larger, higher-value accounts, evidenced by a record 31 new customers signed in the quarter and a 180% increase in average contract value. The company’s core offering, Sophia DDM, saw its analysis volume rise 9% to 99,000 patients, while the customer base grew to 488, with churn concentrated exclusively among small, low-revenue accounts.
Regional momentum was broad-based: EMEA returned to historic growth levels (24% YoY), North America surged 29%, and Asia-Pacific volumes climbed 35%, with Japan revenue coming online for the first time. Notably, the liquid biopsy segment, led by MSK Access, is scaling rapidly—over 2,000 analyses in Q3 (tripling YoY), though only about 20% of signed customers are live, indicating substantial ramp potential in coming quarters. Adjusted gross margin held at 73.1% despite a 40% increase in data processed, underscoring platform scalability and cost discipline.
- Contract Mix Shift: Focused sales on larger accounts, with churn limited to sub-$8,000 customers, boosting net dollar retention to 108%.
- Biopharma Reversal: Headwinds have abated, with AstraZeneca and other pharma wins turning the segment into a growth driver.
- Operating Leverage: Adjusted OPEX up just 1% YoY (ex-currency and one-time items), demonstrating expense control even as bookings and implementations accelerate.
Sophia’s operating loss widened due to FX, stock-based comp, and legal costs, but underlying EBITDA improved 13% ex-these items. Cash burn rose to $13.1M, reflecting strategic investments and timing of vendor payments, but the $81.6M cash balance supports ongoing growth initiatives.
Executive Commentary
"Our performance continues to be driven by the three growth drivers we outlined at the start of the year, implementing and expanding across new accounts, growing in the U.S. market, and capitalizing on new applications such as MSK Access."
Dr. Yurgy Kamblong, Co-founder and Chief Executive Officer
"Despite these temporary charges, we remain proud of our ability to grow revenue 23% without substantially increasing headcount or OPEX. We expect we will be able to continue to show operating leverage for future revenue growth."
George Cardosa, Chief Financial Officer
Strategic Positioning
1. Upmarket Shift and Land-and-Expand Execution
Sophia’s go-to-market pivot toward larger institutions is reshaping its customer and revenue profile. The strategy is visible in the record number of new customers signed and the sharp rise in average deal size. The company is prioritizing expansion within existing accounts, with major hospitals like Gustave Roussy and Sunnybrook Health Sciences Center adopting additional applications. This approach is driving higher net retention and building a durable, high-value pipeline.
2. Liquid Biopsy and AI Differentiation
MSK Access, Sophia’s liquid biopsy solution, is emerging as a key growth engine, with 60 customers signed globally and adoption accelerating. The AI-powered platform standardizes complex data from decentralized labs, a capability that appeals to both clinical and biopharma customers. The recent launch of Digital Twins—a multimodal, AI-driven decision support tool—positions Sophia at the frontier of precision oncology and real-world evidence, expanding its total addressable market (TAM).
3. Biopharma Pipeline and Global CDX Partnerships
Biopharma has shifted from a drag to a catalyst, as evidenced by the AstraZeneca wins and a swelling pipeline that now includes most of the top 20 pharma companies. Sophia’s global CDX (companion diagnostics) strategy, delivered through partnerships with Myriad Genetics in the U.S. and Adam Innovations in Japan, enables pharma clients to access a hybrid, decentralized-regulated testing model—addressing a major industry pain point and positioning Sophia for multi-year contract wins.
4. Platform Scalability and Margin Discipline
Despite a 40% YoY surge in data processed, Sophia maintained adjusted gross margins above 73%, a testament to the operating leverage and efficiency of its cloud-based genomics platform. Ongoing investments in data science and compute optimization are offsetting inflationary pressures, while OPEX growth remains tightly managed, supporting the path to breakeven.
5. Global Diversification and Regional Tailwinds
Growth is balanced across geographies, with EMEA, North America, and Asia-Pacific all contributing significantly. Japan is ramping, and Latin America, though currently soft, shows booking momentum for a future rebound. This diversification mitigates regional risk and enhances pipeline visibility.
Key Considerations
This quarter’s results mark a structural inflection for Sophia Genetics, as the business transitions from volume-driven growth to a model anchored in large, strategic accounts and high-value applications. The following factors are central to understanding the company’s evolving investment case:
Key Considerations:
- Deal Size Acceleration: The 180% YoY jump in average contract value is driving pipeline quality and future revenue visibility.
- Liquid Biopsy Ramp: Only a minority of signed MSK Access customers are live, with a significant ramp expected over the next 2-3 quarters.
- Pharma Pipeline Strength: Pharma is no longer a headwind; new deals and a broadened pipeline with top 20 players set up multi-year growth.
- Margin Sustainability: Platform innovations are offsetting data and compute cost inflation, keeping gross margins above 73% despite surging analysis volumes.
- Implementation Backlog: A record backlog of new accounts provides forward visibility but requires sustained execution to convert into revenue.
Risks
Sophia faces execution risk in onboarding a record backlog of new and complex accounts, with timing variability in implementations and milestone-based pharma revenue recognition. FX volatility and regulatory challenges, particularly in decentralized CDX rollouts, add uncertainty. Ongoing litigation (e.g., patent suit over MSK Access) and reliance on a few large pharma contracts could introduce financial and operational swings if not managed effectively.
Forward Outlook
For Q4 2025, Sophia guided to:
- Mid-teens revenue growth, reflecting conservative seasonal assumptions despite robust underlying momentum.
- Continued gross margin stability and disciplined OPEX, excluding currency and one-time items.
For full-year 2025, management raised guidance:
- Revenue of $75 to $77 million (up from $72 to $76 million prior).
- Adjusted EBITDA loss of $39 to $41 million, reflecting FX and social tax headwinds.
Management cited record bookings, a robust implementation pipeline, and accelerating biopharma contributions as drivers of confidence into 2026. Key factors for the next quarters include:
- Ramp of MSK Access and Digital Twins deployments.
- Conversion of large pharma contracts to revenue milestones.
- Operational execution on new account go-lives and backlog reduction.
Takeaways
Sophia Genetics has entered a new phase of growth, defined by upmarket customer wins, AI-driven product expansion, and a reinvigorated pharma business. The company’s ability to sustain margin discipline while scaling high-value applications will be central to its path toward profitability and market leadership.
- Pipeline Quality Uptrend: The shift to larger deals and a swelling implementation backlog enhances revenue visibility, but puts pressure on delivery and onboarding teams to realize value quickly.
- Product Innovation as Differentiator: MSK Access and Digital Twins are attracting both clinical and pharma partners, deepening Sophia’s competitive moat in decentralized genomics and AI-powered diagnostics.
- Watch for Pharma Ramp and Backlog Conversion: Investors should monitor the pace of pharma milestone recognition, MSK Access go-lives, and backlog conversion as leading indicators of sustained growth into 2026.
Conclusion
Sophia Genetics’ Q3 results confirm a decisive shift toward high-value, high-visibility growth, with expanding global demand, disciplined cost management, and a robust innovation pipeline. The company’s execution on onboarding and pharma delivery will determine the durability of its current momentum as it targets breakeven in 2027.
Industry Read-Through
Sophia’s results highlight a sector-wide pivot toward decentralized, AI-powered diagnostics, as hospitals and pharma increasingly demand flexible, in-house solutions and actionable insights from complex data. The inflection in liquid biopsy adoption and companion diagnostic (CDX) partnerships signals a broader industry trend toward hybrid testing models and real-world evidence integration. Competitors relying on centralized models or legacy workflows may face growing pressure as health systems and pharma shift budgets to platforms that offer both scalability and regulatory agility. The rapid expansion of contract value and pipeline quality at Sophia is a bellwether for the genomics and precision medicine space as it enters a new phase of data-driven growth.