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What factors drove the changes in Tempus AI's revenue and profit?

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- **Record Growth**: Oncology (+27%) and Hereditary (+37%) testing volumes driven by efficient sales force and comprehensive portfolio. Data licensing bookings of $150 million highlight strong demand for differentiated analytics.
- **Profitability Milestone**: First-quarter positive EBITDA ($4 million) achieved despite Paige acquisition costs; full-year EBITDA expected to be slightly positive.
- **Strategic Expansion**: Paige acquisition integrates digital pathology with genomics, enabling faster, more accurate diagnostics. Regulatory filings for xF and xR position for long-term reimbursement upside.
- **Sustainable Growth**: 25%+ annual growth target for Genomics and Insights businesses supported by cost control and multiyear data licensing contracts.

**【CEO Summary Section】**
- **Q3 2025 Performance**: Genomics volume grew 3% overall, with Oncology up 27% and Hereditary up 37%. Data licensing bookings reached $150 million, driving Insights business growth of 38%. Achieved first-time positive adjusted EBITDA of $4 million (excluding Paige acquisition costs), with full-year EBITDA expected to be slightly positive.
- **Strategic Initiatives**: MRD reimbursement on track; liquid biopsy xF regulatory filing planned for late 2025. Paige acquisition integrates digital pathology with genomics to enhance diagnostic accuracy and speed.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP net income of $420 million; Non-GAAP EPS of $1.08 exceeded expectations. Adjusted EBITDA turned positive due to cost control and operational efficiency. Paige acquisition added $2 million in quarterly expenses but did not impede EBITDA positivity.
- **Guidance**: Full-year adjusted EBITDA expected to be slightly positive, despite Paige-related drag. Reimbursement for xF and xR expected to provide long-term margin upside, with current average reimbursement at $1,600 per test.

**【Q&A Key Highlights】**
- **MRD Testing**: 27% unit growth in Oncology driven by comprehensive portfolio; Paige's tumor-naive assays for CRC and lung cancer expected to yield data in 2026. No plans for aggressive market expansion post-reimbursement.
- **Reimbursement & Pricing**: xF FDA submission in Q4 2025; xR PMA submission to follow. ADLT status for FDA-approved tests could increase Medicare list prices, closing gap with peers.
- **Data Licensing**: $150 million in multiyear bookings reflect differentiated data asset; annual contract value >$350 million. Growth driven by software tools and library licensing.
- **Hereditary Business**: Low double-digit industry growth baseline; Ambry expects low to mid-20s growth, with 50% of Q3 gain from share capture. Rare disease testing ASPs higher but still small-scale.
- **Paige Synergies**: Digital pathology algorithms enhance sequencing by predicting mutations when NGS fails; multimodal approach to patient data expected to scale rapidly with reimbursement.

Tempus AI, Inc. (TEM) Q3 2025 Earnings Call Transcript

- **Revenue Super Growth**: 89.6% YoY to $314.6M, Genomics up 115%, Data & Services +35.7%.
- **EBITDA Turnaround**: Sequential improvement to -$5.6M, on track for $5M breakeven by year-end.
- **AI & Data Expansion**: $750M convertible notes fund growth, 41% Insights revenue surge, $350PB data partnership with AstraZeneca.
- **MRD Catalyst**: End-2025 reimbursement target, rare/pediatric testing at #2 market share.
- **Cash Strong**: $290M liquidity, $375M debt reduction.

**【CEO Summary Section】**
- Q2 2025 revenue surged 89.6% YoY to $314.6 million, driven by Genomics (+115%) and Data & Services (+35.7%).
- Genomics revenue reached $241.8M, with oncology volumes up 26% QoQ and hereditary testing at 32% of total.
- Adjusted EBITDA improved sequentially to -$5.6M, narrowing from -$16M last quarter, with full-year guidance of $5M breakeven.
- Issued $750M 0.75% convertible notes, reducing interest expense and enhancing cash position to $290M.
- Raised 2025 revenue guidance to $1.26B, up from prior $1.1B, with $110M EBITDA improvement YoY.

**【CFO Financial Commentary】**
- Q2 gross profit $195M (+160% YoY), with Data & Services Insights growing 41%.
- Sequential EBITDA improvement reflects disciplined investment in growth drivers like MRD and AI partnerships.
- Cash & marketable securities at $290M, with $375M net debt reduction post-convertible notes issuance.

**【Q&A Key Highlights】**
- **Genomics Growth**: Oncology volumes up 28% QoQ, hereditary testing outperforming expectations, rare/pediatric testing at #2 market share.
- **Data Business**: Signed $350PB clinical data partnership with AstraZeneca, Insights revenue up 41%.
- **MRD Reimbursement**: Targeting end-2025 MolDx approval, with potential 2026 revenue impact.
- **AI Strategy**: Building foundation models for drug discovery, with 1,000 H200 GPUs and 350PB data integration.
- **Liquidity**: $290M cash, $750M convertible notes reducing interest expense by ~$30M annually.

Tempus AI, Inc. (TEM) Q2 2025 Earnings Call Transcript

- **Record Q1 Growth**: $255.7M revenue (+75.4% YoY), $155.2M gross profit (+99.8% YoY). Full-year 2025 guidance raised to $1.25B.
- **Breakthrough Deal**: $200M AZ-Pathos partnership adds 300+ PB data, pushing total RCV >$1B. First model version expected in 9-12 months.
- **Data Business Strength**: 43% YoY growth in Data & Services. $940M pre-signed contracts at Q1 start, now >$1B RCV.
- **Cost Efficiency**: 5% YoY opex decline. Adjusted EBITDA improved $27.8M YoY to -$16.2M.
- **MRD Pipeline**: xM assay volumes controlled due to no reimbursement. Personalis tumor-informed assay shows 99.7% sensitivity.


**【CEO Opening Remarks】**
- Q1 2025 revenue reached $255.7 million, up 75.4% YoY, driven by 89% growth in genomics revenue ($193.8M) and 31% growth in oncology testing. Data & Services segment grew 43% YoY to $61.9 million.
- Gross profit surged 99.8% YoY to $155.2 million, with adjusted EBITDA improving to -$16.2 million (vs. -$43.9M YoY). Full-year 2025 revenue guidance raised to $1.25 billion (+80% YoY).
- Announced $200M 3-year data licensing deal with AstraZeneca & Pathos, adding 300+ petabytes of multimodal data. Total remaining contract value exceeds $1 billion.

**【CFO Financial Highlights】**
- GAAP net income: $42.1 million. Non-GAAP EPS: $1.08 (vs. $0.85 consensus). Adjusted EBITDA improved $27.8 million YoY.
- Data licensing revenue from AZ-Pathos deal will be recognized ratably over 3 years. First-year contribution: ~$67 million. Remaining contract value: $1.03 billion.
- Cost control achieved 5% YoY decline in operating expenses, driving 20%+ operating margin expansion.

**【Key Q&A Takeaways】**
- **AZ-Pathos Deal Structure**: $50M upfront payment, $35M compute cost reimbursement, $150M variable consideration (50% stock). No upfront revenue recognition; 3-year subscription model.
- **Hereditary Testing Growth**: 23% unit growth vs. prior guidance of mid-teens. Driven by unmet demand in inherited disease risk assessment.
- **MRD Pipeline Momentum**: xM assay volumes metered due to lack of reimbursement. Tumor-informed assay (Personalis) shows 99.7% sensitivity; tumor-naive assay in colorectal cancer performs well in early studies.
- **Data Business Visibility**: $940M of signed but undelivered contracts at Q1 start. AZ deal adds $200M+ pipeline visibility.

**【Long-Term Investment Priorities】**
- Genomics expansion: MRD, tumor-naive platforms, liquid biopsy innovation.
- AI & foundation models: Compute infrastructure, multimodal data integration, clinical trial optimization.
- Strategic partnerships: Pharma collaborations, clinical trial data sharing networks.


Tempus AI (TEM)-6 May 25-2025 Q1 Earnings call transcript

- **Revenue Acceleration**: Q4 2024 saw 35.8% YoY growth, driven by genomics and data businesses. Gross profit surged 49.7%.
- **Ambry Synergy**: 2025 Ambry contribution expected at 17-19% YoY, with West Coast lab integration to enhance redundancy.
- **Data Contract Strength**: $940 million total remaining contract value ensures 2025 visibility, with 140% net retention.
- **AI Expansion**: Launch of Olivia AI app and integration of third-party algorithms into Tempus network highlight AI-driven growth.
- **Profit Milestone**: 2025 guidance includes $5 million adjusted EBITDA, marking cash flow positivity.

**【CEO Summary Section】**
- **Revenue Growth**: Q4 2024 revenue grew 35.8% YoY, with gross profit up 49.7%. Total remaining contract value reached $940 million, and net revenue retention hit 140%.
- **Acquisition Update**: Closed the Ambry Genetics acquisition on February 3, integrating a West Coast lab to enhance redundancy and workflow expansion.
- **Guidance Update**: Raised 2025 revenue guidance to $1.24 billion and expects $5 million of adjusted EBITDA, driven by accelerating growth in genomics and data businesses.
- **AI and Data Strategy**: Highlighted the success of the Data and Services business, with plans to integrate AI applications like Olivia AI into patient care.

**【CFO Financial Commentary】**
- **Financial Performance**: Q4 2024 GAAP net income was $420 million, with Non-GAAP EPS exceeding expectations at $1.08. Strong cost control reduced operating expenses by 5% YoY.
- **Seasonality and Contribution**: Ambry contributed 2 months of results in Q1 2025, with expected gradual ramp-up. Seasonality similar to core Tempus business, with Q1 typically the lowest revenue quarter.
- **Contract Visibility**: $940 million total remaining contract value provides visibility into 2025, with large agreements driving predictable revenue streams.

**【Q&A Key Highlights】**
- **Ambry Integration**: Ambry's West Coast lab will enable somatic workflow expansion over 1-2 years. 2025 growth rate for Ambry estimated at 17-19%, lower than 2024 due to lapped accelerants.
- **Data Business Dynamics**: Lumpy growth in data contracts (e.g., $10 million delayed delivery) impacts quarterly revenue. Long-term visibility from $940 million contract backlog, with 140% net retention.
- **Reimbursement Wins**: Secured ADLT status for 20% of XT volume in Q1, with Medicare reimbursement uplift for liquid biopsy. New in-network Blue Cross/Blue Shield partnerships to improve commercial payer ASPs.
- **AI and Regulatory Tailwinds**: FDA regulatory changes viewed as tailwinds for AI diagnostics. Launch of Olivia AI app for personalized health insights, monetized via $12/month subscription.
- **Capital Allocation**: No major M&A planned; focus on small data/AI acquisitions. 2025 investments balanced between growth and EBITDA positivity, with no immediate profit maximization.

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