TEM

Tempus AI, Inc.

AI '25: Data Owners AI '25: Healthcare Applications

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Overview

Tempus AI, Inc. offers genetic testing and data analysis to personalize patient care. Its Diagnostics segment provides diagnostic and pathology tests, while Dat

Tempus AI, Inc. offers genetic testing and data analysis to personalize patient care. Its Diagnostics segment provides diagnostic and pathology tests, while Data and Applications licenses multimodal medical insights to researchers. Diagnostics generates roughly 75% of revenue, with Data and Applications contributing 25%. They serve over 5,500 hospitals, 8,500 oncologists, and major pharmaceutical companies.

What They Do (Plain English & Analogies): Tempus AI is essentially the 'Google for Cancer Data,' but they're expanding beyond just cancer. They operate high-tech laboratories that perform genetic sequencing (like DNA and RNA tests) for patients, which helps doctors understand a patient's specific disease at a molecular level. But their real power comes from combining this genetic information with a massive library of other patient data, including medical records, pathology images, and radiology scans. They use advanced Artificial Intelligence (AI) to analyze all this 'multimodal' data to generate insights. Think of a traditional diagnostic lab as a standalone GPS that tells you where you are. Tempus is like Waze; it takes your location (your test results) but combines it with the real-time data of millions of other drivers (patients) to tell you the best route to take (the best treatment) and predicts where the traffic (the disease) is going next. They then license these insights and data to pharmaceutical companies to help them discover and develop new drugs faster, and they also provide tools to help doctors make more informed treatment decisions and match patients to clinical trials.
Very Brief History: Founded in 2015 by Eric Lefkofsky (co-founder of Groupon) after his wife's cancer diagnosis revealed a lack of data-driven treatment options. Originally Tempus Labs, the company spent years building a massive multimodal data library. Key milestones include changing its name to Tempus AI in January 2023 to emphasize its AI focus, the acquisition of Ambry Genetics in February 2025 to bolster hereditary testing, and the acquisition of Paige in March 2025 to integrate AI-driven digital pathology. In March 2025, Tempus also acquired Deep 6 AI to expand its clinical trial recruitment capabilities. In late 2025, the company achieved its first quarter of positive adjusted EBITDA.
"Street Stereotype": The 'AI-Powered Lab' that is finally proving its business model. For years, the Street viewed Tempus as a high-burn venture project that might just be a commoditized testing lab with an 'AI' marketing wrapper. However, recent performance has shifted the narrative toward Tempus being a legitimate 'Data Owner' that can monetize its library through high-margin pharmaceutical partnerships while reaching profitability.
Subsidiaries On Linked In*: Ambry Genetics, Paige, Deep 6 AI.
Customer Sectors & Example Clients: Customer sectors include Pharmaceutical & Biotechnology companies, Health Systems (Hospitals), and Academic Research Institutions. Specific clients mentioned or highly likely based on partnerships include AstraZeneca, Pathos AI, GSK, Sanofi, and Bristol Myers Squibb. Tempus is connected to over 5,500 hospitals, more than 8,500 regularly ordering oncologists, approximately 65% of all U.S. academic medical centers, and partners with 95% of the top 20 pharma oncology companies.
New Customers / Segments They'Re Targeting: Tempus is expanding its reach beyond oncology into new disease areas and patient populations. This includes cardiology, with its FDA-cleared Tempus ECG-Low EF software, and mental health, with the AI-powered clinical assistant Notetaker. They are also expanding into rare disease testing through Ambry Genetics' ExomeReveal offering. The acquisition of Deep 6 AI significantly broadens their network, adding over 750 provider sites and access to more than 30 million patients, enhancing their ability to identify patients for clinical trials and close care gaps. They are also focused on expanding the sales of their Minimal Residual Disease (MRD) offering, which is currently highly constrained but has significant growth potential.
How Key Themes May Help/Hurt: The buildout of Tempus's primary themes – AI, data ownership, and multimodal data integration – is central to its strategy. This buildout helps by creating a powerful data network effect: as more doctors use Tempus tests, the proprietary dataset grows, making the AI models smarter and the data more valuable to pharmaceutical companies, creating a virtuous cycle. The high-margin data licensing (Insights) segment, fueled by this unique data, has software-like margins and recurring revenue potential. AI-driven products like Paige Predict and their Immune Profile Score enhance diagnostic value, making their tests more attractive to physicians and accelerating growth. Expansion into new disease areas like cardiology and mental health broadens their market opportunity. However, this strategy also carries risks. It requires significant capital investment in GPU capacity and specialized talent for AI model development and data integration. There is also uncertainty around reimbursement for 'dry lab' (AI/algorithmic) tests, which could limit their clinical adoption and revenue. Furthermore, if open-source AI models become highly commoditized, the long-term value of raw data libraries could face pressure, requiring Tempus to continuously reinvest to maintain its 'data moat.'

3 Main Long-Term Bull Details

Proprietary Multimodal Data Moat and AI Advantage: Tempus possesses over 450 petabytes of connected multimodal data, integrating molecular, clinical, imaging, and pathology data. This unique, real-time dataset is a powerful differentiator for training AI models and generating insights, creating a significant competitive moat that is difficult to replicate. The ongoing development of foundation models, including the one with AstraZeneca and Pathos AI, is expected to further accelerate this advantage and drive growth in both diagnostics and data licensing.
High-Margin Data Licensing (Insights) Growth: The Insights segment, which licenses Tempus's proprietary data and technology to pharmaceutical companies, is a powerful growth engine with software-like margins. It demonstrated 69% growth in Q4 2025 (including a one-time warrant impact) and is projected to grow roughly 40% in Q1 2026, with net revenue retention of 126%. This segment's strong performance and increasing total contract value (TCV) validate the monetization of Tempus's data asset and its value in drug discovery and development.
Accelerating Diagnostics Business with Strategic Expansion: Tempus's core Oncology Diagnostics business is accelerating, with unit growth of 29% in Q4 2025. Key drivers include the rapid growth of MRD (Minimal Residual Disease) testing (56% quarter-over-quarter growth, despite being highly constrained), the migration to FDA-approved versions of tests like xT CDx, and the upcoming xF liquid biopsy FDA submission. The comprehensive platform, offering DNA, RNA, liquid biopsy, and heme offerings, along with AI-driven insights like Paige Predict, makes Tempus's tests increasingly valuable to physicians.

3 Main Long-Term Bear Details

Reimbursement Uncertainty and Gaps: Despite progress, Tempus still faces a significant reimbursement gap compared to established peers, with average reimbursement levels currently well below parity. The path to securing ADLT (Advanced Diagnostic Laboratory Test) status and consistent Medicare pricing for new assays like xF liquid biopsy and MRD is not guaranteed. Delays in FDA approvals or unfavorable CMS pricing decisions could severely impact the company's ability to reach long-term margin targets and fully monetize its diagnostic offerings.
Capital Intensity and Execution Risk of AI Models: Maintaining high-tech labs while simultaneously funding massive AI compute power for foundation models and integrating disparate data modalities (imaging, pathology, molecular) is technically challenging and capital-intensive. If these 'dry lab' algorithmic tests fail to gain standardized reimbursement or widespread clinical adoption, the heavy R&D spend could drag on profitability and dilute the core diagnostics business.
Competition and Potential Commoditization of Data/AI: While Tempus currently boasts a strong 'data moat,' the rapid evolution of AI and the potential for large language models to become more commoditized could put pressure on the long-term value of raw data libraries. Established players and new entrants are also investing heavily in AI and data. Maintaining a differentiated 'data moat' requires constant, expensive reinvestment in technology and talent, and there's a risk that competitors or open-source initiatives could develop similar capabilities, eroding Tempus's competitive edge.

Competitors And Differentiation: Tempus competes against large, well-funded, established diagnostic companies such as Natera and Guardant. Tempus differentiates itself through its unique and comprehensive multimodal data asset, which integrates genomics, clinical data, pathology imaging, and radiology data, making it difficult for competitors to replicate. Their AI advantages allow them to generate deeper insights from this data, leading to 'Intelligent Diagnostics' that enhance test accuracy and personalization. They are deeply embedded in clinical workflows, connected to a vast network of hospitals and oncologists, enabling real-time data access and insight delivery. This integrated platform and technology advantage drive growth across all their assays and allow them to 'pull further and further away' from the competition in the data licensing space.
Recent Performance & What The Market'S Focused On: Tempus had an exceptional 2025, with total core business revenue up over 33% (much higher when factoring in the Ambry acquisition). The Diagnostics business is accelerating, with Oncology unit growth of 29% and MRD growth of 56% quarter-over-quarter. The Data business is growing even faster, with licensing (Insights) up 69% in Q4 2025 (including a one-time warrant impact) and projected 40% growth in Q1 2026, with total contract value exceeding $1.1 billion and net revenue retention of 126%. The company guided to $1.59 billion in revenue for 2026, in line with its 25% long-term growth expectations, and approximately $65 million of positive adjusted EBITDA. The market is focused on the durability of the 30%+ Oncology volume growth, the rapid ramp-up of MRD testing, the successful launch and performance of its foundation models (with the first version for AstraZeneca hitting benchmarks in Q1 2026), the continued strong growth and monetization of the high-margin data licensing business, and the progression of ASPs (Average Selling Prices) towards over $2,200 in the coming years, driven by the migration to FDA-approved xT CDx and future xF liquid biopsy approvals.
Brands And Revenue Segments: Tempus operates two main revenue segments: **Diagnostics (or Genomics)** and **Data & Services**. The Diagnostics segment generates the majority of revenue (historically around 70%) and includes various tests and platforms. The Data & Services segment contributes the remaining revenue (historically around 30%) through licensing and applications. **Brands/Products:** * **Diagnostics/Genomics:** * **xT:** DNA profiling (solid tumor profiling) * **xR:** RNA profiling * **xF:** Liquid biopsies * **xH:** Heme offering (whole genome heme offering going live in 2026) * **xE:** Whole exome offering * **MRD:** Minimal Residual Disease testing * **Paige Predict:** AI-powered digital pathology applications to predict mutations and generate insights from pathology slides * **Immune Profile Score:** AI-driven insights refining traditional biomarkers * **HRD-RNA algorithm:** Next-generation model for Homologous Recombination Deficiency * **Tempus ECG-Low EF:** AI software to identify patients with low left ventricular ejection fraction * **Notetaker:** AI-powered clinical assistant for psychiatrists * **Data & Services / Applications:** * **Insights:** Licensing business of linked clinical, molecular, and imaging de-identified data, along with analytical services * **Trials (TIME):** Clinical trial matching services * **Next:** Care gap product * **Algos:** Suite of algorithmic tests in oncology * **Hub:** Desktop and mobile platform for ordering, managing, and receiving tests and patient results * **Lens:** Platform for researchers and scientists to find, access, and analyze Tempus data * **David:** Generative AI clinical co-pilot **Revenue Breakdown:** * Diagnostics (Genomics) and core Oncology Diagnostic business are growing 30%+ * Data business is growing even faster, with Insights up 69% in Q4 2025 (including one-time impact) and projected 40% growth in Q1 2026. * Hereditary business (part of Diagnostics) is expected to grow in the high teens for 2026.

Bull / Bear Details

Tempus AI is a premier 'Data Owner' in healthcare AI, leveraging its vast multimodal data and proprietary distribution to drive accelerating high-margin data li

Thesis

Tempus AI is a premier 'Data Owner' in healthcare AI, leveraging its vast multimodal data and proprietary distribution to drive accelerating high-margin data licensing and precision diagnostics. As of February 27, 2026, the company has achieved a critical inflection point with confirmed 2026 adjusted EBITDA profitability and sustained 30%+ core business growth, reinforcing its unique position as vital infrastructure for pharmaceutical R&D and clinical decision-making, making the bull case highly compelling.

Bull case

Tempus's proprietary multimodal data, now exceeding 450 petabytes, combined with its extensive distribution network to over 5,500 hospitals and 8,500 oncologists, creates a significant competitive moat that is difficult to replicate. The data business is accelerating, with Insights revenue up 69% in Q4 (partially due to a one-time warrant impact) and projected 40% growth in Q1 2026, supported by a strong 126% net revenue retention and over $1.1 billion in total contract value.
The Diagnostics business is accelerating, with Oncology unit growth reaching 29% in Q4 2025. Minimal Residual Disease (MRD) volumes showed extraordinary 56% quarter-over-quarter growth, with management indicating potential for 20x higher volumes if sales efforts were unconstrained by reimbursement. Average Selling Prices (ASPs) are projected to exceed $2,200, primarily driven by the migration of xT CDx to FDA-approved versions by the end of 2026.
Tempus has achieved a significant financial milestone, guiding to approximately $65 million of positive adjusted EBITDA for 2026, demonstrating strong operational discipline and a shift towards sustainable profitability. The company's balance sheet is in great shape, providing a solid foundation for continued investment in its AI advantages and expansion initiatives, including a second, larger cluster of GB200s for foundation models.

Bear case

Despite progress, Tempus continues to face a significant reimbursement gap compared to established peers, with the path to securing ADLT status and consistent Medicare pricing for new assays like MRD remaining uncertain. The "highly constrained" sales effort for MRD due to reimbursement considerations highlights ongoing challenges, and delays in FDA approvals or unfavorable CMS decisions could impact long-term margin targets.
While recent data bookings were strong, the data licensing business can be inherently lumpy, as evidenced by the "one-time impact of the AstraZeneca warrant" contributing to Q4's 69% growth, with Q1 2026 projected at a more moderate 40%. Maintaining a "data moat" against traditional AI players entering healthcare requires constant, expensive reinvestment in GPU capacity and specialized talent, potentially impacting profitability.
The Hereditary testing segment, while still growing, has decelerated to 23% unit growth in Q4 2025 and is expected to moderate further to a "high teens longer-term growth rate" with some lumpiness in 2026. This moderation places increased reliance on the successful "ungating" and scaling of MRD, which is currently constrained, and the effective integration of complex multimodal data from acquisitions like Paige AI.

Bull / Bear Case

Bear Case: Valuation remains a key headwind. The near-term revenue surge relies on lumpy data licensing tied to multiyear TCV deals (e.g., the AstraZeneca warrant) and a one-time uplift that may not repeat. Reimbursement for new assays (including MRD, xF/ADLT) remains uncertain, leaving a persistent gap between clinical value and realized revenue. MRD volumes are highly sensitive to payer coverage and sales-force deployment, which is only partially ungated. Competitive threats from large AI players and traditional diagnostic peers could compress pricing and erode Tempus's moat. Opex for global AI compute and platform integration could limit margin expansion, leaving EV/Revenue multiple under pressure if growth slows or profitability stalls. Additionally, data license revenue is inherently cyclical and can disappoint when large bookings don't convert promptly.
Bull Case: Tempus AI sits at an inflection point where accelerating Diagnostics growth (on Oncology + MRD and Hereditary) pairs with a fast-rising Data/Insights business, supported by a proprietary multimodal data moat. 2025 results showed core revenue up about 33% with the Ambry acquisition, and Insights licensing up 69% year over year (126% net revenue retention), with more than $1.1 billion of total contract value. The company guides to roughly $1.59 billion of revenue and about $65 million of positive adjusted EBITDA in 2026, underscoring a shift toward profitability. A foundation-model program with AstraZeneca and Pathos could unlock additional data-driven insights, while Paige Predict expands diagnostics where sequencing fails. The installed base—5,500 hospitals and 8,500 oncologists—supports scalable, high-margin licensing, with a path to accelerating 25%+ growth over the next three years.
More Compelling & Why: Bear. Valuation appears stretched relative to peers on forward revenue. Anchor: EV/Revenue, which is likely in the high single-digit to low double-digit range vs peers near mid-single digits. The strongest argument is the data licensing revenue is lumpier than expected and reimbursement/ADLT timing remains uncertain, risking multiple compression. To flip the view, Tempus would need sustained >25%+ revenue growth with EBITDA margins improving meaningfully and a lower EV/Revenue multiple (4-5x) or clear, recurring FCF >6%.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Insights Segment Total Contract Value (TCV) & Net Revenue Retention	High TCV and NRR demonstrate strong demand for Tempus's proprietary data and AI insights from pharmaceutical clients, validating the 'Data Owner' thesis and providing significant revenue visibility and high-margin growth.	Updates on total contract value (TCV) backlog. Net Revenue Retention (NRR) for the Insights segment. Q1 2026 Data and Applications revenue growth.	Bullish: TCV continues to rise faster than revenue, exceeding $1.1 billion significantly; NRR remains above 120%; Q1 2026 Data and Applications revenue growth meets or exceeds 40%. Bearish: TCV growth slows or declines; NRR falls below 120%; Q1 2026 Data and Applications revenue growth misses 40% projection.	Company earnings calls, investor presentations, press releases, SEC filings (10-Q, 10-K).	Pharmaceutical company press releases announcing partnerships with data providers (though Tempus-specific might be limited).	AlphaSense/Sentieo: Keyword searches for 'Tempus' and 'data licensing' in pharma earnings calls; EvaluatePharma: R&D spending trends in oncology.
Foundation Model Internal Development & Compute Expansion	This indicates Tempus's commitment to leveraging its proprietary multimodal data for advanced AI, which is expected to be 'catalytic' for both diagnostics (smarter tests) and data business (more valuable insights).	Announcements regarding additional GPU cluster procurements (e.g., GB200s). Management commentary on the progress and impact of internal foundation models across different data types (radiology, pathology, cardiology, neuropsych).	Bullish: Further announcements of significant compute capacity expansion; Specific examples of how internal models are enhancing diagnostic products or data insights. Bearish: Lack of updates on compute expansion or internal model progress; Management shifts focus away from aggressive AI development.	Company earnings calls, investor presentations, press releases.	Industry news on AI hardware procurement by healthcare tech companies; NVIDIA earnings calls for commentary on demand from healthcare AI.	Thinknum: AI/ML job postings for Tempus; Gartner/IDC reports: Healthcare AI market trends and investment.
xT CDx FDA-Approved Version Migration & ASP Impact	Transitioning to FDA-approved versions and achieving ADLT status is crucial for closing the reimbursement gap and significantly increasing ASPs, directly impacting gross margins and overall profitability.	Average Selling Price (ASP) for Diagnostics. Percentage of xT CDx volume migrated to the FDA-approved version. Management commentary on progress towards exiting 2026 with the vast majority of volume on the FDA-approved version.	Bullish: ASPs for Diagnostics increase quarter-over-quarter, moving towards the >$2,200 target; Management confirms on track to migrate the vast majority of xT CDx volume to FDA-approved version by end of 2026. Bearish: ASPs stagnate or decline; Delays in xT CDx migration or lower-than-expected reimbursement for the FDA-approved version.	Company earnings calls, investor presentations, press releases, SEC filings (10-Q, 10-K).	CMS/MolDx updates on reimbursement for FDA-approved companion diagnostics.	Definitive Healthcare: Lab test reimbursement rates; Sg2: Payer coverage policies for genomic tests.
MRD (Minimal Residual Disease) Volume Growth & Sales Force Ungating	MRD testing represents a massive growth opportunity. Rapid volume acceleration, especially if the sales force is unconstrained, signals significant market penetration and future revenue potential, validating Tempus's platform advantage.	Quarter-over-quarter MRD unit growth rates. Management commentary on progress with reimbursement for MRD and the timeline for unblocking the sales force.	Bullish: Sustained QoQ MRD unit growth >50%; Management announces specific timelines or progress on broad MRD reimbursement or sales force unblocking. Bearish: Significant deceleration in QoQ MRD unit growth (<30%); Delays or setbacks in reimbursement discussions or sales force expansion plans.	Company earnings calls, investor presentations, press releases, SEC filings (10-Q, 10-K).	Industry news on MRD reimbursement trends (e.g., MolDx updates), competitor MRD volume reports.	DeciBio: MRD market share data; IQVIA: Oncology testing volumes by assay type.
2026 Adjusted EBITDA Achievement	Reaching and sustaining positive adjusted EBITDA demonstrates operational efficiency and financial discipline, proving the company's ability to scale profitably and de-risk the investment thesis from a high-burn startup to a sustainable platform.	Quarterly adjusted EBITDA figures throughout 2026. Management commentary on cost management and operating leverage.	Bullish: Quarterly adjusted EBITDA consistently positive and on track to meet or exceed the $65 million full-year 2026 guidance. Bearish: Quarterly adjusted EBITDA turns negative or shows significant deviation from the $65 million full-year guidance.	Company earnings calls, investor presentations, SEC filings (10-Q, 10-K).	None directly applicable for intra-quarter EBITDA.	Bloomberg/Refinitiv: Consensus analyst estimates for EBITDA; S&P Global Market Intelligence: Financial models and projections.

Key Reported Metrics3 rows

Metric	Why It Matters	Last Period
Data & Services Revenue Growth (Insights)	This segment is central to the 'Data Owner' thesis, representing high-margin licensing of Tempus's multimodal library to pharma. It validates the monetization of proprietary data through AI in drug discovery and development.	69%
Diagnostics Oncology Unit Growth	This metric indicates clinical adoption of NGS testing, which simultaneously generates proprietary molecular data for the Insights library and powers algorithmic diagnostic tools, fueling Tempus's AI flywheel.	29%
Total Revenue	As a high-growth AI healthcare leader, total revenue growth confirms market share gains in NGS and clinical data markets. Sustained growth is essential to support Tempus's premium valuation and prove the scalability of its integrated diagnostics and data-driven business model.	33%

Key Questions

Can Tempus sustain its 30%+ Oncology volume growth, especially as Hereditary moderates, and effectively ungate its MRD sales force to drive significant volume,

Can Tempus sustain its 30%+ Oncology volume growth, especially as Hereditary moderates, and effectively ungate its MRD sales force to drive significant volume, while successfully migrating xT CDx to FDA-approved versions to boost ASPs in 2026?

Question 2: Given the strong 69% Q4 (with warrant impact) and projected 40% Q1 growth in the Insights segment, along with the foundation model hitting Q1 benchmarks, can Tempus maintain this accelerated data licensing growth and further monetize its 'Data Owner' moat amidst increasing competition from traditional AI players entering healthcare?
Question 3: Can Tempus achieve its guided $65 million in positive adjusted EBITDA for 2026 while continuing to aggressively invest in GPU capacity and foundation model development across various data types, demonstrating efficient scaling of its AI initiatives?

Rerating Thresholds3 rows

Metric	What'S Needed For Rerating	Why It Matters	Earnings Date
Genomics Revenue	Genomics Revenue growth needs to hit 28-30% YoY, significantly exceeding the company's long-term 25% CAGR guidance and the current 24% consensus. A rerating requires evidence that MRD volume is scaling rapidly and that the transition to FDA-approved ADLT status is driving higher average selling prices (ASPs) toward peer parity.	Genomics is the volume engine feeding Tempus's high-margin data library. Sustained 30%+ growth proves market share gains against incumbents like Natera and Guardant. Achieving this threshold validates the scalability of the diagnostic business and provides the necessary cash flow to fund capital-intensive AI foundation model development.	2026-02-24
Total Revenue	Total Revenue growth needs to exceed 35% year-over-year, significantly outperforming management's long-term 25% CAGR guidance and the current 32.8% mark. To trigger a valuation rerate, this must be driven by the high-margin 'Insights' segment maintaining 38%+ growth, proving that the $150 million in TCV bookings are converting into recognized revenue ahead of the Q1 2026 foundation model release.	Sustained 35%+ growth validates Tempus as a high-margin AI platform rather than a traditional diagnostic lab. It proves the 'Data Owner' thesis is scalable and that proprietary datasets can drive recurring pharmaceutical licensing revenue, justifying a tech-premium multiple and de-risking concerns regarding the 'lumpy' nature of data contracts.	2026-02-24
Data & Services Revenue	To trigger a valuation rerating, Data & Services revenue growth must accelerate to 55% YoY or higher (up from the current 48.4%), while the segment's contribution to total revenue must climb toward 35%. Additionally, management needs to report full-year 2025 Total Contract Value (TCV) bookings exceeding $600 million to prove that the massive $150 million Q3 2025 booking was a sustainable shift in demand rather than a lumpy, one-time event.	This metric validates the 'Data Owner' thesis. High-margin data licensing is the primary differentiator between Tempus and lower-multiple diagnostic labs. Sustained 55%+ growth proves the scalability of the AI platform, justifying a tech-software valuation multiple rather than a traditional healthcare services multiple.	2026-02-24

Earnings Transcript Summary2 rows

2026-02-24 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Accelerating Growth and Market Share: Management highlighted that both Diagnostics and Data businesses are growing rapidly and performing above expectations, with Oncology unit growth accelerating and the Data business growing even faster. They also emphasized their platform advantage in driving growth across all assay types. 2. Leveraging AI and Proprietary Data: Eric Lefkofsky stressed the unique position of Tempus with its proprietary data (over 450 petabytes of connected multimodal data) and distribution network (5,500+ hospitals, 8,500+ oncologists) as a key differentiator against competitors in the AI space. The company is doubling down on foundation model efforts, expecting them to be catalytic for both diagnostic and data businesses. 3. Achieving Profitability and Strong Financial Health: The company guided to approximately $65 million of positive adjusted EBITDA for 2026 and noted its balance sheet is in great shape, indicating a focus on sustainable financial performance.	The overall takeaway of the call is that Tempus AI had an exceptional 2025, with both its Diagnostics and Data businesses growing rapidly and exceeding expectations, and is well-positioned for a strong 2026. Management expressed high confidence in the company's AI advantages, proprietary data moat, and ability to achieve sustainable profitability. The tone was highly positive and optimistic, emphasizing accelerating growth, strategic investments in AI, and strong financial health.	For Q3 2025, Oncology unit growth was 27% year-over-year, indicating an acceleration in Q4 2025. Hereditary unit growth was 37% year-over-year in Q3 2025, showing a deceleration in Q4 2025. Data Licensing/Insights grew 38% year-over-year in Q3 2025, which accelerated significantly to 69% in Q4 2025 due to a one-time impact.	1. AI's value distribution and Tempus's data protection: Analysts questioned how Tempus's position is protected on the data side given traditional AI players entering healthcare. Management responded that Tempus is uniquely positioned with both proprietary data (450+ petabytes of connected multimodal data) and proprietary distribution (connected to 5,500+ hospitals and 8,500+ oncologists), making it difficult to replicate. 2. MRD volumes and the sales force strategy: Analysts inquired about the significant potential for MRD volumes (20x higher) if the sales force was fully engaged. Management clarified that the 20x higher figure was a hypothetical highlighting the strength of their MRD offering, which is currently highly constrained due to reimbursement considerations. They intend to ungate this effort over time as reimbursement is established. 3. Data and Services revenue guide and visibility for 2026: Analysts asked about the embedded data and services revenue in the 2026 guide and visibility into in-year bookings. Management stated that strong bookings have provided greater visibility into 2026 revenue than ever before, with a high percentage of revenue already committed. They also noted that the vast majority of this segment is data licensing.	Total core business revenue (including Ambry acquisition) was up over 33% year-over-year. In Diagnostics, Oncology unit growth was 29% year-over-year, and Hereditary unit growth was 23% year-over-year. The Data licensing business (Insights) was up 69% year-over-year, factoring in the one-time impact of the AstraZeneca warrant, with a projection of roughly 40% growth for Q1 2026.

2025-11-04 · 2025Q3 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Profitability Milestone: Achieving positive adjusted EBITDA for the first time in company history ($4M excluding the Paige acquisition). 2. Data Licensing Scale: Executing high-value contracts, highlighted by $150M in new total contract value (TCV) bookings this quarter. 3. Durable Growth: Maintaining a consistent 25% growth trajectory for the next three years by optimizing the sales force and expanding the MRD (Minimal Residual Disease) and liquid biopsy portfolio.	Takeaway: Tempus has reached a critical inflection point, proving it can achieve profitability (Adjusted EBITDA positive) while simultaneously accelerating year-over-year growth in its core segments. The massive $150M in data bookings reinforces their 'Data Owner' moat in the AI space. Tone: Highly confident, disciplined, and focused on long-term scale over short-term volatility.	Q2 2025 Y/Y Growth: Genomics (Overall): 26%; Data Licensing/Insights: 31%. (Growth accelerated in both major segments in Q3).	1. Drivers of Genomics Volume: Analysts asked if growth was due to market shifts or internal execution. Mgmt attributed it to a more efficient, better-trained sales force and the integration of their technology into physician workflows. 2. MRD and Reimbursement: Analysts questioned the go-to-market speed for MRD testing. Mgmt responded they will 'dial up' volume as reimbursement is secured to ensure sustainable, long-term growth rather than artificial short-term spikes. 3. Data Booking Disclosures: Analysts asked about the $150M in new bookings and backlog. Mgmt explained that while they usually report TCV annually, these specific deals were significant enough to highlight the widening gap between Tempus and its competitors in data licensing.	Genomics (Overall): 33% y/y growth (Oncology: 27%, Hereditary: 37%); Data Licensing/Insights: 38% y/y growth.

Transcript Tidbits2 rows

2026-02-24

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Tempus's MRD growth rate was 56% quarter-over-quarter, described as extraordinary. Hereditary unit growth was 23%. The company launched Paige Predict, which can generate insights from digitized pathology slides even when sequencing fails, making tests 'a little better than somebody else'. ASPs are expected to reach over $2,200 in the coming years, primarily driven by the migration of xT CDx to the FDA-approved version by the end of 2026. The xF liquid biopsy has been submitted to the FDA, with contributions expected in 2027. There is also anticipated upside from commercial payers. Foundation model efforts are expected to accelerate insights for the diagnostic business. The company has a whole genome heme offering going live this year. MRD volumes were around 4,700 tests in Q4, with 56% quarter-over-quarter growth, despite a 'highly constrained sales effort' which, if unblocked, 'could be 20x higher'. The Ambry acquisition broadened the comprehensive nature of their testing, especially in hereditary profiling.	Tempus believes it is 'uniquely positioned' due to its proprietary data and distribution at scale, possessing over 450 petabytes of connected multimodal data. The CEO stated that replicating their data business would be 'an enormous lift' that they have been on for 10 years, and 'other people have been unable to replicate it'. The company feels it is 'pulling further and further away from the competition' in the data licensing space. Their core technology advantage is seen as driving the growth across all five of their assays (xT, xR, xF, xH, xE). In solid tumor, Tempus is growing 'faster than others'. They also noted that they didn't have to 'overly push on the accelerator for tumor naive' products, implying a strong position in tumor-informed offerings.	The markets are 'a bit anxious around AI and how value is getting distributed within that ecosystem', with 'traditional AI players push into the healthcare sphere'. The most interesting AI business models, particularly for large language or multimodal models, are seen as centering around access to proprietary data for training and proprietary distribution for insights. The market for sequencing is growing, with sequencing becoming 'more prevalent amongst our ordering physicians and ultimately patients'. There is a significant trend of provider partners wanting to contribute de-identified data to platforms like Tempus's to accelerate research and drug discovery, driven by the ongoing challenge of cancer mortality and the need to 'stop the waste'. The 'goalposts keep moving' for tumor-naive products, requiring continuous improvement.	Tempus guided to $1.59 billion in revenue, in line with its 25% long-term growth expectations, and approximately $65 million of positive adjusted EBITDA, positioning them for a 'phenomenal 2026'. The licensing business is projected to grow roughly 40% this quarter, with net revenue retention at 126%. The foundation model for AstraZeneca hit its Q1 benchmarks, and Tempus has procured a second, larger cluster of GB200s for additional internal models across various data types. These models are expected to be 'catalytic' for both diagnostics and data businesses. Oncology volume growth is not expected to see a 'massive slowdown', while Hereditary growth is anticipated to moderate to 'high teens longer-term growth rate' with some lumpiness in 2026. The company plans to 'ungate' its MRD sales effort eventually, expecting to become a 'very large MRD supplier'. Core Oncology Diagnostic and data businesses are projected to grow '30-plus percent'. A whole genome heme offering will go live this year. Investment priorities remain focused on bringing technology and AI to diagnostics to ensure data-driven decisions.	Data	AI integration and value distribution in specialized industries, Data Moats and Proprietary Distribution in the Age of AI, Multimodal AI and Foundation Models in Healthcare.	2025 was an exceptional year for Tempus. Our Diagnostic business is accelerating and performing above expectation. Our data business is growing even faster. Net revenue retention was 126%, which is super strong. We're poised for a phenomenal 2026. Tempus is uniquely positioned in that. We have both of those at scale. The data business is just kind of having a moment and the growth is actually accelerating. We're incredibly long on the value that these models are going to deliver. Our unit growth in Oncology is really strong and showing no signs of slowing down. We just have got crazy amounts of demand for our data products.	Markets are a bit anxious around AI and how value is getting distributed. All next-generation sequencing has some amount of error. Some percentage of the time... you have results that can't be returned to a physician. Hereditary growth rates in 2026... might be a little bit lower in Q1. It's a function of reimbursement. The goalposts keep moving. We realized that we just weren't getting the performance off the first version of our assay. It's tough to continue growing at the same rate.	In terms of the sales force, we've made no big moves to reorg the sales force. We did that, obviously, early '25, and we announced the impact of that. And so the good news is we're long lapping that.

2025-11-04

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Tempus is expanding its reach through MRD reimbursement, which is currently on track, and the planned regulatory filing of its liquid biopsy xF later in 2025. The company raised its Hereditary growth expectations to the low to mid-20s. Additionally, the acquisition of Paige AI allows Tempus to expand into digital pathology, enabling them to return results even when traditional NGS sequencing fails or lacks sufficient tissue material. The company is also scaling its 'rare' business, aiming to become a major player in that niche over the next 12-18 months.	Tempus competes against large, well-funded, established diagnostic companies, but claims a significant advantage through its unique data asset and proprietary software. CEO Eric Lefkofsky noted that unlike some competitors who may be seeing 'one-time benefits' from shifting between solid and liquid testing, Tempus's growth is driven by sales force efficiency and a comprehensive portfolio. The company believes it is 'pulling further and further apart' from peers in the data licensing space due to the scale and integration of its clinical and molecular datasets.	The industry is seeing a general tailwind as more biomarkers are identified, leading to increased NGS testing volumes. The broader Hereditary cancer market is estimated to be growing in the low double digits. Lefkofsky highlighted a structural necessity for AI in the U.S. healthcare system, noting that with $5.7 trillion in annual spending growing at 7.5%, the only solution to waste and error is the deployment of predictive and preventative 'intelligence' or AI.	Tempus has issued a long-term guide of 25% growth for the next three years. The company achieved positive adjusted EBITDA for the first time in Q3 2025 and expects to be slightly positive for the full year. Its foundation model, developed with AstraZeneca and Pathos, is finishing the pretraining phase, with first versions expected in Q1 2026. Throughout 2026, the company plans to migrate the majority of its testing volume to FDA-approved or ADLT versions to close the reimbursement gap with peers.	Data	Multimodal data integration (combining molecular, pathology, and imaging data) is emerging as the next frontier for precision medicine. There is also a focus on the 'NVIDIA moment' for healthcare AI—the potential for rapid, high-margin revenue scaling once algorithmic diagnostic tests (dry lab) achieve standardized reimbursement paths similar to traditional wet lab tests.	“Q3 was a great quarter all around.”; “Positive adjusted EBITDA for the first time this quarter.”; “Our data product is just really differentiated.”; “We're just pulling further and further apart from anybody else we know of in the data space.”; “We expect to grow at about 25% for the next 3 years.”	“Hereditary growth will moderate a bit.”; “Any time you make changes to sales forces... you kind of cause havoc.”; “Total reimbursement on average is... well below parity with our peers.”; “It isn't well reimbursed, if at all [referring to algorithmic tests].”	The company highlighted its technical depth, mentioning it has '400 PhDs' and a significant number of software engineers on staff. It also noted recent significant changes and reorganization of its sales force to better align with the MRD portfolio and improve efficiency.

Earnings Results3 rows

Genomics is the volume engine feeding the Insights data library; while Oncology is 29% and Hereditary 23%, there is no consolidated Genomics YoY figure reported

Metric	Prior Quarter	Rerating Trigger	Actual Reported	Hit Target?	Notes
Genomics Revenue	24.0%	Genomics Revenue growth needs to hit 28-30% YoY, significantly exceeding the company's long-term 25% CAGR guidance and the current 24% consensus. A rerating requires evidence that MRD volume is scaling rapidly and that the transition to FDA-approved ADLT status is driving higher average selling prices (ASPs) toward peer parity.	Genomics YoY growth not explicitly disclosed in the Q4 2025 call; Oncology growth 29% YoY and Hereditary growth 23% YoY cited for the Diagnostics segment; Genomics as a whole was not presented as a single YoY growth figure.	Partially	Genomics is the volume engine feeding the Insights data library; while Oncology is 29% and Hereditary 23%, there is no consolidated Genomics YoY figure reported in the transcript. Threshold suggests 28-30% sustained growth; partial alignment observed via subsegment performance, but not a clear, disclosed Genomics YoY figure.
Total Revenue	32.8%	Total Revenue growth needs to exceed 35% year-over-year, significantly outperforming management's long-term 25% CAGR guidance and the current 32.8% mark. To trigger a valuation rerate, this must be driven by the high-margin 'Insights' segment maintaining 38%+ growth, proving that the $150 million in TCV bookings are converting into recognized revenue ahead of the Q1 2026 foundation model release.	Total core revenue was up over 33% YoY in the Q4 2025 results call.	No	Missed the 35%+ target by a modest margin. Management cited strong demand and a robust 2026 outlook, including a target of about $1.59 billion of revenue, but the explicit YoY threshold was not met in the quarter.
Data & Services Revenue	48.4%	To trigger a valuation rerating, Data & Services revenue growth must accelerate to 55% YoY or higher (up from the current 48.4%), while the segment's contribution to total revenue must climb toward 35%. Additionally, management needs to report full-year 2025 Total Contract Value (TCV) bookings exceeding $600 million to prove that the massive $150 million Q3 2025 booking was a sustainable shift in demand rather than a lumpy, one-time event.	Data & Services (Insights) grew 69% YoY in Q4 2025 (including one-time AstraZeneca warrant impact).	Yes	Exceeded the threshold decisively (69% vs 55%+). This supports the data-owner thesis and aligns with the large $1.1B+ TCV bookings, indicating strong demand for data licensing and related services.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	IS CHANGE	Price Reaction
2026-02-24	Tempus AI reported strong Q4 2025 results, with core revenue up 33% and data licensing accelerating, projecting 40% growth for Q1 2026. They guided for $1.59 billion revenue and $65 million adjusted EBITDA in 2026, emphasizing significant MRD potential and AI advancements. Despite beating expectations, the stock dropped 7.32% (underperforming SPY), indicating persistent market concerns over reimbursement, data licensing volatility, or execution risks.	Other	Bearish		False	-7.32% (vs SPY: -8.16%)

Upcoming Events7 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
TEM_5cbe0a33	Q1 where we had to hit certain benchmarks	2026-01-01	2026-03-31	AstraZeneca's validation and acceptance of Tempus's first foundation model, for which benchmarks were submitted in Q1 2026.	Successful validation confirms the model's performance, potentially leading to further collaboration, data monetization, and accelerating insights for both diagnostics and data businesses. Bullish if accepted, bearish if performance issues arise.	Ticker	2026-02-24	earnings_transcript
TEM_cfd0d81c	unlikely to have much of a '26 impact from ASP, but as we get into '27, we'll start to contribute	2026-01-01	2026-12-31	FDA approval of Tempus's xF liquid biopsy assay, which has been submitted to the FDA.	FDA approval is a prerequisite for ADLT status and broader reimbursement, expected to significantly increase ASPs and contribute to revenue starting in 2027. Bullish if approved, bearish if rejected or delayed.	Ticker	2026-02-24	earnings_transcript
TEM_b3d020d3	as we get into '27, we'll start to contribute	2026-10-01	2027-03-31	CMS granting of Advanced Diagnostic Laboratory Test (ADLT) status for Tempus's xF liquid biopsy assay.	ADLT status is crucial for securing favorable and consistent reimbursement, leading to a significant ASP lift and closing the reimbursement gap with competitors. Bullish if granted, bearish if delayed or denied.	Ticker	2026-02-24	earnings_transcript
TEM_30f7dd10	by the end of 2026 to be exiting with the vast majority of volume on that FDA-approved version	2026-01-01	2026-12-31	Completion of the migration of Tempus's xT CDx testing volume to the FDA-approved version.	This migration is the biggest driver of the expected $500+ ASP upside, directly impacting gross margins and revenue per test. Bullish if completed as planned, bearish if delayed.	Ticker	2026-02-24	earnings_transcript
TEM_05709eff	over time	2026-01-01	2028-12-31	Broad unblocking of Tempus's MRD sales force and securing widespread reimbursement for MRD testing.	This would significantly increase MRD test volumes, contributing to the company's 25%+ long-term growth target and market share gains in oncology diagnostics. Bullish if unblocked and reimbursed, bearish if delayed.	Ticker	2026-02-24	earnings_transcript
TEM_0bbe29e3	at some point, we'll have a really nice assay market	2026-07-01	2027-12-31	Launch of Tempus's second-generation tumor-naive MRD assay.	This new assay aims to offer improved performance and compete more effectively in subtypes where tissue is sparse, potentially expanding market reach and driving volume. Bullish if launched with strong performance, bearish if further delays or poor performance.	Ticker	2026-02-24	earnings_transcript
TEM_a4910b39	goes live this year	2026-01-01	2026-12-31	Launch of Tempus's whole genome heme offering.	This expands Tempus's diagnostic portfolio, potentially attracting new customers and increasing revenue from the heme oncology market. Bullish if launched successfully and gains traction.	Ticker	2026-02-24	earnings_transcript