What happened

Shares of Sema4 Holdings (WGS -3.96%) were sinking 17.7% as of 11:36 a.m. EDT on Tuesday. The decline came after the genomic and clinical data intelligence platform company announced its second-quarter results following the market close on Monday.

So what

Sema4 reported Q2 revenue of $46.9 million, up 56% year over year. The company posted a net loss of $45.4 million, wider than its net loss of $32.1 million in the prior-year period. Many investors were clearly hoping for better results, as evidenced by today's big sell-off.

DNA with an image of a person's head and shoulders and 1s and 0s in the background.

Image source: Getty Images.

It's been less than a month since Sema4 went public via a merger with special purpose acquisition company (SPAC) CM Life Sciences. When the deal was first announced in February, CM Life Sciences' board chairman Keith Meister said that Sema4's revenue should grow from $200 million to $500 million and gross margin should double by 2023.

Sema4 CFO Isaac Ro thinks that revenue goal is attainable. He stated, "Volume growth is strong and we remain confident in our long-term goal of delivering $500 million in 2023 revenue as we partner with health systems, expand the menu of offerings, and scale the business."

Perhaps the bigger challenge for Sema4 will be to improve its gross margin. The company posted a gross loss of nearly $2.8 million in Q2 due to higher costs of services.

Now what

Sema4's collaborations could be the main thing to watch with the company over the near term. In recent months, Sema4 expanded its partnerships with NorthShore University HealthSystem, AdventHealth, and Avera Health.