SOPHiA Genetics heads into its third-quarter report with the most confident story it has told in some time, and with a stock that has already rewarded that confidence. Last quarter brought accelerating revenue, a raised full-year outlook and the first companion diagnostic deals in the company's history. It also brought a gross margin slide that cut against management's earlier promise of slight expansion this year. The November 3 release, due before the open, is the first real test of whether new CEO Ross Muken's upbeat narrative holds once the margin question is put under a brighter light.
The Street expects a loss of 13 cents a share on revenue of about $23.9 million. That would be a 22.8% revenue gain from the $19.5 million posted a year ago and a sharp narrowing from the 30-cent loss in the year-ago quarter. Some of the per-share improvement likely reflects a larger share count after the $57.5 million offering, so the cleaner read on profitability will come from adjusted EBITDA. Management reaffirmed an adjusted EBITDA loss of $29 million to $32 million for 2026. With roughly $18 million of losses booked in the first half, that leaves room for only about $11 million to $14 million over the final two quarters, which implies a meaningful step down from the $8.8 million second-quarter loss. Anything near the old run rate would raise doubts about the promised approach to breakeven by year-end.
On revenue, the consensus looks measured rather than heroic. Management lifted its full-year range to $94 million to $96 million, or 22% to 24% growth, and the Street's third-quarter estimate sits squarely within that pace. It is also slower than the 27% growth delivered last quarter and only modestly above second-quarter revenue on a sequential basis. That gives SOPHiA a reasonable chance to clear the bar if the drivers that powered the acceleration stay intact. The US business is the one to scrutinize: revenue jumped 64% last quarter on 60% volume growth. Liquid biopsy revenue rose 80%, and with 80 MSK Access customers signed, more than half still pre-revenue, conversion of that backlog into billing is the most direct path to upside. Net dollar retention of 117% and record analysis volume of 115,000 provide further yardsticks; a repeat would confirm that the expand motion with larger accounts is working, which matters because new logo additions slowed to 24.
Gross margin is the swing factor. Adjusted gross margin fell to 72.1% from 75.4% in the first quarter, hurt by early biopharma project costs, a shift toward lower-margin implementation services, and rising cloud and AI compute costs as the company expands into new regions. Management still expects improvement over the year. A rebound toward the mid-70s would validate that view; another slip would suggest the growth mix is structurally less profitable than the bull case assumes. The AstraZeneca companion diagnostic programs and the planned Memorial Sloan Kettering joint venture are largely 2027 and 2028 stories, so progress updates, including any move toward a definitive JV agreement, matter more than near-term revenue from them.
Expectations have climbed with the share price. The stock is up 21.5% since the last report while the S&P 500 was flat, and at $7.35 it trades comfortably above its 200-day average of $5.88, though well off its post-earnings high of $8.98. Sentiment remains bearish but has eased slightly, to 25.7% bearish from 27.4% a quarter ago, suggesting skeptics are softening rather than capitulating.
The central issue is whether SOPHiA can keep growth near the upper end of its range while showing that the margin dip was temporary. Strong US conversion paired with steadier gross margin and a visibly smaller EBITDA loss would keep the improving narrative intact. Growth without margin recovery would leave the profitability timeline looking more fragile than last quarter's tone implied.