Earnings release
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Tempus Reports Second Quarter 2025 Results August 8, 2025 CHICAGO--(BUSINESS WIRE)--Aug. 8, 2025-- Tempus AI, Inc. (NASDAQ: TEM), a technology company leading the adoption of AI to advance precision medicine and patient care, today reported financial results for the quarter ended June 30, 2025. Revenue increased 89.6% year-over-year to $314.6 million in the second quarter Genomics revenue increased 115.3% year-over-year to $241.8 million on accelerating year-over-year volume growth in Oncology (26%) and Hereditary (32%) testing Data and services revenue increased 35.7% year-over-year to $72.8 million, led by Insights (data licensing), which grew 40.7% year-over-year Quarterly gross profit was $195.0 million, a 158.3% year-over-year increase Issued $750 million of 0.75% convertible senior notes that will drive significant interest expense and cash savings Increasing full year 2025 revenue guidance to $1.26 billion, along with positive adjusted EBITDA of $5 million, a $110 million improvement over 2024 “The business is performing well with revenues and margins growing faster than expected, contributing to our continued improvement in adjusted EBITDA on a year-over-year basis,” said Eric Lefkofsky, Founder and CEO of Tempus. “We saw significant re-acceleration of our clinical volumes which grew 30% in the quarter, as we delivered more than 212,000 NGS tests. Combined with our continued leadership in AI and progress toward building the largest foundation model in oncology, ‘we’re hitting our stride’ as we approach our 10th anniversary.” Second Quarter Summary Results Quarterly revenue increased 89.6% year-over-year to $314.6 million. Genomics contributed $241.8 million in revenue in the quarter, growing 115.3% compared to the second quarter of 2024. Oncology testing (Tempus genomics) delivered $133.2 million of revenue, up 32.9% year-over-year with approximately 26% volume growth versus 20% last quarter. Hereditary testing (Ambry genetics) contributed $97.3 million of revenue, up 33.6% year-over-year on a pro forma basis1 with approximately 32% volume growth. Revenue from Data and services totaled $72.8 million in the second quarter, delivering 35.7% growth versus the second quarter of 2024, led by Insights (data licensing), which grew 40.7% year-over-year. Generated $195.0 million in quarterly gross profit, reflecting a 158.3% increase year-over-year. Improvement in reported net loss of ($42.8 million) in the second quarter of 2025, including fair value gains of $37.8 million related to our marketable equity securities and stock compensation and employer payroll tax related to stock-based compensation of ($24.3) million, compared to a net loss of ($552.2 million) in the second quarter of 2024. Adjusted EBITDA of ($5.6 million) in the second quarter of 2025 compared to ($31.2 million) in the second quarter of 2024, an improvement of $25.6 million year-over-year. 1 The pro forma amounts have been calculated after applying the Company's accounting policies Second Quarter and Recent Operational Highlights Strengthened Financial Flexibility: Just after quarter end, we completed an upsized offering of $750 million 0.75% convertible senior notes, enhancing our balance sheet and allowing us to replace a portion of the existing term loan with a significantly lower interest debt instrument.
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We also ended the quarter with $293.0 million in cash and marketable securities, an improvement of ~$70 million over last quarter. Expanded AI-Powered Clinical Tools: Extended Tempus Next™ care pathway intelligence platform into breast cancer, furthering AI-driven decision support across oncology. In addition, Tempus One™, our generative AI clinical assistant, was integrated into leading electronic health record (EHR) systems to enhance physician workflows and point-of-care insights. Advanced MRD and monitoring: Introduced Tempus xM™ for treatment and response monitoring (TRM), a liquid biopsy assay designed to monitor immunotherapy response in patients with advanced solid tumors, providing clinicians with actionable, real-time insights. We also expanded our exclusive collaboration with Personalis to include colorectal cancer as the fourth indication under the NeXT Personal® MRD commercial partnership. Reached new database milestone: Through more than 4,500 integrations, we are now connected to more than 40 million clinical patient records, with ~9 million de-identified and ingested, spanning ~1.1 billion healthcare documents, a significant percentage of which are connected to the ~4 million samples we have sequenced. As a result, our database now stands at >350 petabytes of connected clinical and molecular data. Approaching 10-Year anniversary: As we near Tempus’ 10-year anniversary, we’re reflecting on a decade of innovation and collaboration which now spans more than 2,000 publications including ~700 peer reviewed articles and ~180 oral presentations. Second Quarter Financial Results Three Months Ended June 30, 2025 2024 Change (in thousands, except percentages and per share amounts) (unaudited) Revenue $ 314,635 $ 165,969 89.6% Gross profit $ 195,039 $ 75,513 158.3% Loss from operations $ (61,774) $ (533,492) NM(1) Net loss $ (42,843) $ (552,212) NM(1) Adjusted EBITDA $ (5,580) $ (31,186) 82.1% Net loss per share attributable to common shareholders, basic and diluted $ (0.25) $ (6.86) 96.4% Non-GAAP net loss per share $ (0.22) $ (0.63) 65.1% ____________ (1) Not meaningful due to the impact of stock compensation expense and employer payroll tax related to stock-based compensation associated with the initial public offering in June 2024 Financial Outlook and Guidance Tempus is increasing its guidance and now expects full year 2025 revenue of approximately $1.26 billion for the consolidated business, which represents approximately 82% annual growth, and Adjusted EBITDA of $5 million for full year 2025, an improvement of approximately $110 million over 2024. For additional information on the quarter, including a letter from our CEO and CFO, please visit our investors relations site at investors.tempus.com. Webcast and Conference Call Information A conference call and webcast will be held on Friday, August 8, 2025 at 8:00 a.m. Eastern Time. Interested parties may access details using: Conference ID: 7005219 Domestic Dial-in Number: (800) 715 - 9871 International Dial-in Number: (646) 307 - 1963 Live webcast: https://edge.media-server.com/mmc/p/irtvw27b The webcast may be accessed on the company’s investor relations website at investors.tempus.com. For those unable to listen to the live webcast, a recording will be made available on the company’s website after the event and will be accessible for one year. Visit the investor relations website to find the company’s latest deck, and commentary on the quarter and year by Eric Lefkofsky, Founder and CEO and Jim Rogers, CFO, which will be discussed on the conference call and webcast. About Tempus Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. With one of the world’s largest libraries of multimodal data, and an operating system to make that data accessible and useful, Tempus provides AI-enabled precision
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medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. The goal is for each patient to benefit from the treatment of others who came before by providing physicians with tools that learn as the company gathers more data. For more information, visit tempus.com. Non-GAAP Financial Measures In addition to the financial information presented in this release in accordance with accounting principles generally accepted in the United States of America (GAAP), Tempus also presents adjusted non-GAAP financial measures. Non-GAAP gross profit is defined as GAAP gross profit, excluding stock-based compensation expense and employer payroll tax related to stock-based compensation (collectively, the “stock-based compensation adjustments”). Non-GAAP gross margin is defined as gross profit, excluding the stock-based compensation adjustments, as a percentage of revenue. Non-GAAP operating expenses are calculated as the sum of technology research and development expense, research and development expense, and selling, general and administrative expense, excluding the stock-based compensation adjustments, acquisition-related expenses, amortization of intangibles due to acquisition, and franchise taxes related to our IPO. Non-GAAP loss from operations is defined as loss from operations, adjusted to exclude (i) stock-based compensation expense, (ii) employer payroll tax related to stock-based compensation expense, (iii) acquisition-related expenses, (iv) franchise taxes related to our IPO, and (v) amortization of intangibles due to acquisition. Non-GAAP net loss is defined as net loss, adjusted to exclude (i) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (ii) stock-based compensation expense, (iii) employer payroll tax related to stock-based compensation expense, (iv) acquisition-related expenses, (v) amortization of intangibles due to acquisition, (vi) losses on equity method investments, (vii) (benefit from) provision for income taxes, (viii) the payment of $2.3 million of our Series G-4 convertible preferred stock in connection with the initial public offering (the "G-4 Special Payment"), (ix) franchise taxes related to our IPO, and (x) amortization of deferred other income from our IP License Agreement with SB Tempus. Non-GAAP net loss per share is defined as non-GAAP net loss divided by weighted average common shares outstanding, basic and diluted. Adjusted EBITDA is defined as net loss, adjusted to exclude (i) interest income, (ii) interest expense, (iii) depreciation and amortization, (iv) provision for (benefit from) income taxes, (v) losses on equity method investments, (vi) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (vii) stock-based compensation expense, (viii) employer payroll tax related to stock-based compensation expense, (ix) acquisition related expenses, (x) the G-4 Special Payment, (xi) amortization of deferred other income from our IP License Agreement with SB Tempus, and (xii) franchise taxes related to our IPO. Tempus believes these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by institutional investors and the analyst community to help them analyze the health of Tempus’ business. In particular, Adjusted EBITDA is a key measurement used by Tempus management to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures. Tempus does not provide guidance for net loss, the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA, and similarly cannot provide a reconciliation between Tempus’ forecasted Adjusted EBITDA and net loss without unreasonable effort due to the unavailability of reliable estimates for certain components of net income (loss) and the respective reconciliations. These forecasted items are not within Tempus’ control, may vary greatly between periods, and could significantly impact future financial results. Other Key Metrics Total Remaining Contract Value (TCV) is equal to the total potential value of signed contracts and assumes the exercise of all contract options, all discretionary opt-ins, and no early termination. Remaining TCV excludes any revenue recognized to date on these contracts or any future adjustments made to the contractual value as a result of amendments or terminations. Net Revenue Retention compares the annual Insights product revenue generated from all customers that made an Insights purchase in one year to the annual Insights product revenue generated from the same cohort of customers in the subsequent year. Forward Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, about Tempus and its industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including, but not limited to, Tempus’ expected financial results for full year 2025; expectations concerning the interest and cost savings associated with our convertible senior notes; and other statements that are not historical fact. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Tempus cautions you that the foregoing may not include all of the forward-looking statements made in this press release. You should not rely on forward-looking statements as predictions of future events. Tempus has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that it believes may affect Tempus’ business, financial condition, results of operations and prospects. These forward-looking statements are subject to risks and uncertainties related to: the intended use of Tempus’ products and services; Tempus’ financial performance; the ability to attract and retain customers and partners; managing Tempus’ growth and future expenses; competition and new market entrants; compliance with new laws, regulations and executive actions, including any evolving regulations in the artificial intelligence space; the ability to maintain, protect and enhance Tempus’ intellectual property; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures or investments, including Tempus’ ability to realize the expected benefits of the acquisition of Ambry Genetics and Deep 6 AI; the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, trade tensions and tariffs, and war or other armed conflict, as well as risks, uncertainties, and other factors described in the section titled “Risk Factors” in Tempus’ Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“the SEC”) on February 24, 2025, as supplemented by Tempus' Form 10-Q for the quarter ended June 30, 2025, filed with the SEC on August 8, 2025, as well as in other filings Tempus may make with the SEC in the future. In addition, any forward-looking statements contained in this press release are based on assumptions that Tempus believes to be reasonable as of this date. Tempus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. Tempus AI, Inc.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (in thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net revenue Genomics $ 241,843 $ 112,324 $ 435,647 $ 214,893 Data and services(1) 72,792 53,645 134,725 96,896 Total net revenue $ 314,635 $ 165,969 $ 570,372 $ 311,789 Cost and operating expenses Cost of revenues, genomics 99,756 68,324 184,539 121,159 Cost of revenues, data and services 19,840 22,132 35,591 37,420 Technology research and development 34,482 77,908 67,873 104,975 Research and development 41,619 68,025 77,493 92,365 Selling, general and administrative 180,712 463,072 335,339 542,636 Total cost and operating expenses 376,409 699,461 700,835 898,555 Loss from operations $ (61,774) $ (533,492) $ (130,463) $ (586,766) Interest income 1,093 1,718 2,906 2,749 Interest expense (21,579) (13,295) (39,582) (26,533) Other income (expense), net 41,729 (7,048) 14,274 (6,299) Loss before (provision for) benefit from income taxes $ (40,531) $ (552,117) $ (152,865) $ (616,849) (Provision for) benefit from income taxes (212) (95) 45,968 (106) Losses from equity method investments (2,100) — (3,983) — Net Loss $ (42,843) $ (552,212) $ (110,880) $ (616,955) Dividends on Series A, B, B-1, B-2, C, D, E, F, G, G-3, and G-4 preferred shares — (11,540) — (39,347) Cumulative undeclared dividends on Series C preferred shares — (668) — (1,174) Net loss attributable to common shareholders, basic and diluted (42,843) (564,420) (110,880) (657,476) Net loss per share attributable to common shareholders, basic and diluted $ (0.25) $ (6.86) $ (0.64) $ (9.02) Weighted-average shares outstanding used to compute net loss per share, basic and diluted 173,381 82,325 171,960 72,930 Comprehensive Loss, net of tax Net loss $ (42,843) $ (552,212) $ (110,880) $ (616,955) Foreign currency translation adjustment 3,756 (43) 8,354 (99) Comprehensive loss $ (39,087) $ (552,255) $ (102,526) $ (617,054) (1) Includes related party revenue of $15,908, $108, $16,539, $215 for the three and six months ended June 30, 2025 and 2024, respectively. Tempus AI, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share and per share amounts) June 30, 2025 December 31, 2024 Assets Current Assets Cash and cash equivalents $ 186,310 $ 340,954 Accounts receivable, net of allowances of $1,545 and $1,141 at June 30, 2025 and December 31, 2024, respectively 266,284 154,819 Inventory 47,600 38,386 Related party asset 2,535 — Prepaid expenses and other current assets 36,476 26,135 Marketable equity securities 104,996 107,309 Total current assets $ 644,201 $ 667,603 Property and equipment, net 92,563 58,056 Goodwill 325,793 73,343 Intangible assets, net 387,564 11,716 Investments and other assets 16,669 8,305 Investment in joint venture 95,718 91,450 Related party asset, less current portion 22,465 — Operating lease right-of-use assets 38,651 14,762
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Restricted cash 1,741 881 Total Assets $ 1,625,365 $ 926,116 Liabilities, Convertible redeemable preferred stock, and Stockholders' equity Current Liabilities Accounts payable 79,323 53,804 Related party payable 25,000 — Accrued expenses 165,903 130,407 Deferred revenue(1) 100,477 75,981 Deferred other income 15,955 15,955 Other current liabilities 16,554 6,964 Operating lease liabilities 9,381 6,459 Accrued data licensing fees 5,567 1,500 Total current liabilities $ 418,160 $ 291,070 Operating lease liabilities, less current portion 45,866 26,199 Convertible promissory note 226,342 168,192 Other long-term liabilities 9,508 15,980 Revolving credit facility 100,000 — Interest payable 5,084 70,450 Long-term debt, net 471,663 267,244 Deferred other income, less current portion 15,955 23,932 Deferred revenue, less current portion 23,225 6,710 Total Liabilities $ 1,315,803 $ 869,777 (1) Includes related party deferred revenue of $36,685 and $0 as of June 30, 2025 and December 31, 2024, respectively. Commitments and contingencies (Note 8) Convertible redeemable preferred stock, $0.0001 par value, 20,000,000 shares authorized at June 30, 2025 and December 31, 2024, respectively, no shares issued and outstanding at June 30, 2025 and December 31, 2024; aggregate liquidation preference of $0 at June 30, 2025 and December 31, 2024, respectively $ — $ — Stockholders' equity Class A Voting Common Stock, $0.0001 par value, 1,000,000,000 shares authorized at June 30, 2025 and December 31, 2024, respectively; 168,580,827 and 157,076,972 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 17 16 Class B Voting Common Stock, $0.0001 par value, 5,500,000 shares authorized at June 30, 2025 and December 31, 2024, respectively; 5,043,789 issued and outstanding at June 30, 2025 and December 31, 2024, respectively 1 1 Non-voting Common Stock, $0.0001 par value, no shares authorized at June 30, 2025 and December 31, 2024, respectively; no shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively — — Treasury Stock, 145,466 shares at June 30, 2025 and December 31, 2024, at cost (3,602) (3,602) Additional Paid-In Capital 2,566,412 2,210,664 Accumulated Other Comprehensive Income 8,448 94 Accumulated deficit (2,261,714) (2,150,834) Total Stockholders' equity $ 309,562 $ 56,339 Total Liabilities, Convertible redeemable preferred stock, and Stockholders' equity $ 1,625,365 $ 926,116 Tempus AI, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands, except per share amounts) Six Months Ended June 30, 2025 2024 Operating activities Net loss $ (110,880) $ (616,955) Adjustments to reconcile net loss to net cash used in operating activities Change in fair value of warrant liability $ — $ (900) Stock-based compensation 45,429 488,313 Gain on warrant exercise — (173) Gain on marketable equity securities (6,007) (2,541) Deferred income taxes (46,216) — Losses from equity method investments 3,983 — Amortization of original issue discount 1,169 691
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Amortization of deferred financing fees 332 255 Change in fair value of contingent consideration — 165 Change in fair value of holdback liability 312 — Amortization of warrant contract asset — 2,422 Depreciation and amortization 48,385 18,348 Provision for bad debt expense 625 327 Change in fair value of warrant asset — 7,700 Non-cash operating lease costs 4,573 3,252 Minimum accretion expense 108 92 PIK interest added to principal 7,157 4,366 Change in assets and liabilities Accounts receivable (49,155) (23,971) Inventory 1,974 (3,845) Prepaid expenses and other current assets (188) (12,409) Investments and other assets (11,073) 1,294 Accounts payable 7,025 (33,371) Deferred revenue(1) 36,836 (28,669) Deferred other income (7,977) — Accrued data licensing fees 3,957 (2,749) Accrued expenses & other 6,991 (2,805) Interest payable 7,122 7,287 Operating lease liabilities (5,942) (4,582) Net cash used in operating activities $ (61,460) $ (198,458) Investing activities Purchases of property and equipment $ (9,588) $ (14,116) Proceeds from sale of marketable equity securities 8,316 23,098 Business combinations, net of cash acquired (Note 4) (380,762) — Purchases of capitalized software (3,295) — Net cash (used in) provided by investing activities $ (385,329) $ 8,982 (1) Includes increase in related party deferred revenue of $36,685 and $0 as of June 30, 2025 and December 31, 2024, respectively. Financing activities Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions $ — $ 381,951 Tax withholding related to net share settlement of restricted stock units — (69,918) Issuance of Series G-5 Preferred Stock — 199,750 Payment of deferred offering costs — (2,714) Dividends paid — (5,625) Proceeds from revolving credit facility, net of original issue discount 98,000 — Proceeds from long-term debt, net of original issue discount 196,000 — Payment of deferred financing fees (958) — Payment of indemnity holdback related to acquisition — (813) Net cash provided by financing activities $ 293,042 $ 502,631 Effect of foreign exchange rates on cash $ (37) $ (90) Net (decrease) increase in Cash, Cash Equivalents and Restricted Cash $ (153,784) $ 313,065 Cash, cash equivalents and restricted cash, beginning of period 341,835 166,607 Cash, cash equivalents and restricted cash, end of period $ 188,051 $ 479,672 Cash, Cash Equivalents and Restricted Cash are Comprised of: Cash and cash equivalents $ 186,310 $ 478,811 Restricted cash and cash equivalents 1,741 861 Total cash, cash equivalents and restricted cash $ 188,051 $ 479,672 Supplemental disclosure of cash flow information Cash paid during the year for interest $ 23,980 $ 13,921 Cash paid for income taxes $ 136 $ 89 Supplemental disclosure of noncash investing and financing activities Dividends payable $ — $ 5,487 Purchases of property and equipment, accrued but not paid $ 6,863 $ 1,108
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Redemption of convertible promissory note $ 14,338 $ 12,476 Non-voting common stock issued in connection with business combinations $ — $ 344 Deferred financing fees, accrued but not yet paid $ 545 $ — Deferred offering costs, accrued but not yet paid $ 95 $ 6,051 Operating lease liabilities arising from obtaining right-of-use assets $ 606 $ — Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering $ — $ 1,348,809 Taxes related to net share settlement of restricted stock units not yet paid $ — $ 164 Reclassification of deferred offering costs to additional paid-in capital upon initial public offering $ — $ 12,347 Class A Voting Common Stock issued in connection with business combinations $ 310,320 $ — Issuance of Series G-3 Preferred Stock $ — $ 3,809 Issuance of Series G-4 Preferred Stock $ — $ 611 Convertible promissory note principal reset due to amendment $ 72,488 $ — Tempus AI, Inc. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (in thousands, except percentages and per share amounts) Genomics Gross Profit & Gross Margin Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Genomics revenue $ 241,843 $ 112,324 $ 435,647 $ 214,893 Cost of revenues, genomics 99,756 68,324 184,539 121,159 Gross profit, genomics $ 142,087 $ 44,000 $ 251,108 $ 93,734 Stock-based compensation expense 1,420 11,327 2,455 11,327 Employer payroll tax related to stock-based compensation 254 136 302 136 Non-GAAP gross profit, genomics $ 143,761 $ 55,463 $ 253,865 $ 105,197 Genomics gross margin 58.8% 39.2% 57.6% 43.6% Stock-based compensation expense 0.6% 10.1% 0.6% 5.3% Employer payroll tax related to stock-based compensation 0.1% 0.1% 0.1% 0.1% Non-GAAP gross margin, genomics 59.4% 49.4% 58.3% 49.0% Data and Services Gross Profit & Gross Margin Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Data and services revenue $ 72,792 $ 53,645 $ 134,725 $ 96,896 Cost of revenues, data and services 19,840 22,132 35,591 37,420 Gross profit, data and services $ 52,952 $ 31,513 $ 99,134 $ 59,476 Stock-based compensation expense 693 7,229 1,304 7,229 Employer payroll tax related to stock-based compensation 114 119 158 119 Non-GAAP gross profit, data and services $ 53,759 $ 38,861 $ 100,596 $ 66,824 Gross margin, data and services 72.7% 58.7% 73.6% 61.4% Stock-based compensation expense 1.0% 13.5% 1.0% 7.5% Employer payroll tax related to stock-based compensation 0.2% 0.2% 0.1% 0.1% Non-GAAP gross margin, data and services 73.9% 72.4% 74.7% 69.0% Total Gross Profit & Gross Margin Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net revenue $ 314,635 $ 165,969 $ 570,372 $ 311,789 Cost of revenues 119,596 90,456 220,130 158,579 Gross profit $ 195,039 $ 75,513 $ 350,242 $ 153,210 Stock-based compensation expense 2,113 18,556 3,759 18,556 Employer payroll tax related to stock-based compensation 369 255 460 255 Non-GAAP gross profit $ 197,521 $ 94,324 $ 354,461 $ 172,021
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Gross margin 62.0% 45.5% 61.4% 49.1% Stock-based compensation expense 0.7% 11.2% 0.7% 6.0% Employer payroll tax related to stock-based compensation 0.1% 0.2% 0.1% 0.1% Non-GAAP gross margin 62.8% 56.8% 62.1% 55.2% Operating Expenses Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Technology research and development $ 34,482 $ 77,908 $ 67,873 $ 104,975 Stock-based compensation expense 3,285 50,434 6,604 50,434 Employer payroll tax related to stock-based compensation 495 1,248 756 1,248 Non-GAAP technology research and development $ 30,702 $ 26,226 $ 60,513 $ 53,293 Research and development $ 41,619 $ 68,025 $ 77,493 $ 92,365 Stock-based compensation expense 2,335 42,233 4,317 42,233 Employer payroll tax related to stock-based compensation 235 676 411 676 Non-GAAP research and development $ 39,049 $ 25,116 $ 72,765 $ 49,456 Selling, general and administrative $ 180,712 $ 463,072 $ 335,339 $ 542,636 Stock-based compensation expense 14,722 377,090 30,749 377,090 Employer payroll tax related to stock-based compensation 774 2,582 5,499 2,582 Acquisition related expenses 1,992 — 5,521 — Amortization of intangibles due to acquisition 16,771 — 27,927 — Franchise taxes related to IPO 1,647 — 1,647 — Non-GAAP selling, general and administrative $ 144,806 $ 83,400 $ 263,996 $ 162,964 Operating expenses $ 256,813 $ 609,005 $ 480,705 $ 739,976 Stock-based compensation expense 20,342 469,757 41,670 469,757 Employer payroll tax related to stock-based compensation 1,504 4,506 6,666 4,506 Acquisition related expenses 1,992 — 5,521 — Amortization of intangibles due to acquisition 16,771 — 27,927 — Franchise taxes related to IPO 1,647 — 1,647 — Non-GAAP operating expenses $ 214,557 $ 134,742 $ 397,274 $ 265,713 Earnings per Share Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net loss $ (42,843) $ (552,212) $ (110,880) $ (616,955) Fair value changes(1) (37,546) 4,870 (5,696) 4,280 Stock-based compensation expense 22,455 488,313 45,429 488,313 Employer payroll tax related to stock-based compensation 1,873 4,762 7,126 4,762 Acquisition related expenses(2) 1,992 — 5,521 — Amortization of intangibles due to acquisition 16,771 — 27,927 — Losses on equity method investments 2,100 — 3,983 — Provision for (benefit from) income taxes 212 95 (45,968) 106 G-4 Special Payment — 2,250 — 2,250 Franchise taxes related to IPO 1,647 — 1,647 — Amortization of technology license (3,988) — (7,977) — Non-GAAP net loss $ (37,327) $ (51,922) $ (78,888) $ (117,244) Non-GAAP net loss per share $ (0.22) $ (0.63) $ (0.46) $ (1.61) Weighted average common shares outstanding, basic and diluted 173,381 82,325 171,960 72,930 (1) Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities. (2) Acquisition related expenses consist of legal, diligence, accounting, and financing costs incurred for acquisitions during the three and six months ended June 30, 2025. Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net loss $ (42,843) $ (552,212) $ (110,880) $ (616,955)
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Interest income (1,093) (1,718) (2,906) (2,749) Interest expense 21,579 13,295 39,582 26,533 Depreciation 8,347 6,415 16,230 12,684 Amortization 19,685 2,744 32,155 5,664 Provision for (benefit from) income taxes 212 95 (45,968) 106 EBITDA $ 5,887 $ (531,381) $ (71,787) $ (574,717) Losses on equity method investments 2,100 — 3,983 — Fair value changes(1) (37,546) 4,870 (5,696) 4,280 Stock-based compensation expense 22,455 488,313 45,429 488,313 Employer payroll tax related to stock-based compensation 1,873 4,762 7,126 4,762 Acquisition related expenses(2) 1,992 — 5,521 — G-4 Special Payment — 2,250 — 2,250 Amortization of technology license (3,988) — (7,977) — Franchise taxes related to IPO 1,647 — 1,647 — Adjusted EBITDA $ (5,580) $ (31,186) $ (21,754) $ (75,112) (1) Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities. (2) Acquisition related expenses consist of legal, diligence, accounting, and financing costs incurred for acquisitions of during the three and six months ended June 30, 2025. Loss from Operations Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Loss from operations $ (61,774) $ (533,492) $ (130,463) $ (586,766) Stock-based compensation expense 22,455 488,313 45,429 488,313 Employer payroll tax related to stock-based compensation 1,873 4,762 7,126 4,762 Acquisition related expenses(1) 1,992 — 5,521 — Franchise taxes related to IPO 1,647 — 1,647 — Amortization of intangibles due to acquisition 16,771 — 27,927 — Non-GAAP loss from operations $ (17,036) $ (40,417) $ (42,813) $ (93,691) (1) Acquisition related expenses consist of legal, diligence, accounting, and financing costs incurred for acquisitions during the three and six months ended June 30, 2025. View source version on businesswire.com: https://www.businesswire.com/news/home/20250808058593/en/ Tempus Communications Erin Carron media@tempus.com Tempus Investor Relations Elizabeth Krutoholow Elizabeth.krutoholow@tempus.com Source: Tempus AI, Inc.
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Q2 2025 Overview A word from our CEO Our goal in writing these quarterly letters is to provide you a summary of our financial and operating results, along with some context as to how we view those results. We had another record quarter - our revenues in Q2 2025 were $314.6 million versus $166.0 million in Q2 2024, an increase of 89.6% on a year-over-year basis. Our Genomics business accelerated in the quarter delivering $241.8 million of revenue in Q2 2025 versus $112.3 million in Q2 2024, an increase of 115.3% year-over-year. Our Data and services business continued its momentum delivering $72.8 million of revenue in Q2 2025 versus $53.6 million in Q2 2024, an increase of 35.7% year-over-year, with our data licensing business (Insights) growing at 40.7% year-over-year. We delivered gross profit of $195.0 million, or gross margin of 62.0%, in Q2 2025 versus $75.5 million, or 45.5% in Q2 2024, an increase of 158.3% year-over-year. Our Genomics business had 58.8% gross margin and our Data and services had 72.7% gross margin in Q2 2025. In the aggregate our gross margin was 1650 basis points higher than the same quarter last year. Our Non-GAAP Operating Expenses were $214.6 million in Q2 2025 versus $134.7 million in Q2 2024, an increase of $79.8 million year-over year, largely driven by increased investments in our core business commensurate with our growth. Our Adjusted EBITDA was ($5.6) million in Q2 2025 versus ($31.2) million in Q2 2024, an improvement of $25.6 million year-over-year. We remain on track to generate positive Adjusted EBITDA for the full year 2025. In summary, Q2 2025 revenues and gross profit were above expectations, and our expenses were largely in line with our plan, resulting in Adjusted EBITDA ahead of expectations. If this sounds a bit like a broken record - that’s a good thing. The business is performing well with revenues growing, margins improving, and our costs remaining in check, allowing us to demonstrate significant year-over-year operating leverage. This is the trend that makes good companies great. Having spent the last 25 years of my professional career building technology companies, I was taught that growth is all that matters. With maturity, I have learned that is dead wrong. At some point you have to detox from endless forward investment and begin to demonstrate quarterly improvements in operating leverage. In other words, you have to generate lots of
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gross profit dollars and not reinvest all of those dollars back in the business. Without this, you can’t generate profits and in the end, all great businesses generate lots of profits. Among all of our accomplishments this quarter, I am perhaps most proud of the fact that we are growing quickly while still improving our financial results, quarter after quarter, as once again we sequentially improved our Adjusted EBITDA from ($16.2) million last quarter to ($5.6) million this quarter, exiting the quarter with a high growth business positioned to generate positive Adjusted EBITDA in the very near term. Genomics As a reminder, we call our diagnostics’ business “Genomics”, which has two main components: Oncology and Hereditary. In Oncology, we saw significant re-acceleration of our year-over- year volume growth rate in Q2, a result of efficiencies finally taking root following the ramp in the size of our salesforce last year. In the quarter, we ran ~ 84,000 NGS tests versus ~66,500 in Q2 2024, representing 26% growth (compared to 20% last quarter). Our Oncology revenue was $133.2 million in Q2 2025, representing 32.9% year-over-year growth, driven by increased volume and improvements in average selling price (ASP) on a year-over year-basis . All of our main therapy selection assays performed well in the quarter with strong growth across our entire portfolio, including our main assays xT (solid tumor) and xF (liquid biopsy), which both saw growth rates accelerate in the quarter. Our Q2 2025 ASP was largely flat compared to Q1 2025 at $1,580, given our mix, which Jim will cover in more detail below. Finally, while we continue to see positive signs across all aspects of our MRD portfolio, we are still restricted by the fact that neither we, nor Personalis, have received reimbursement yet from MolDX. Until that happens, we are gating volumes and the investments we make in rolling out our MRD offering. We have one of the most comprehensive MRD offerings in the market, which covers CRC, breast, lung and IO treated cancers, and includes both tumor-informed, with a highly sensitive WGS assay, and a competitive tumor-naive assay. As a result, we expect that volumes will accelerate quickly once reimbursement is secured. This will likely create more tailwind to our clinical volume growth rates in the future. I n Hereditary, we continued to maintain our strong momentum, running ~128,000 tests in Q2 2025 versus ~97,000 tests in Q2 2024. Our overall Hereditary revenue was $97.3 million, representing year-over-year revenue growth of 33.6% on a pro forma basis 1 and year-over-year 1 The pro forma amounts have been calculated after applying the Company's accounting policies
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volume growth of ~32%. Hereditary cancer screening is driving the majority of the growth, but we continue to scale our rare disorder and pediatric offerings, which we believe will become a larger part of the business over the next several years. While it’s too early to make long-term predictions given that we have only owned Ambry for a few quarters, there is reason to believe that the long-term growth rates of our Hereditary business could be higher than we originally expected. While we continue to gain market share in the short-term, we also believe that the hereditary screening market will continue to grow, both in oncology and other diseases areas. In hindsight, it makes sense. While there are ~1.9mm new cancer diagnoses in the United States per year, there are at any time significantly more people at risk of getting cancer. In other words, the population of people at risk is materially higher than the population of people that are sick. As the leader in hereditary cancer profiling, with our growing footprint in rare disorders and pediatrics, we are uniquely positioned to take advantage of this opportunity. The breadth of our diagnostics offering is truly unique in the market, as we offer best-in-class assays across hereditary profiling, therapy selection, and MRD and monitoring. The numbers speak for themselves. We ran and billed 212,000 NGS tests this quarter, which is 30% year-over-year volume growth. Anytime something that size is growing that fast you know you have product market fit. Our provider partners love Tempus, something I can take very little credit for; that belongs almost entirely to the ~4,000 people that work here who have built our AI-enabled diagnostic platform. Despite the success we have had in capturing market share, we are focused on continually improving our products, bringing the best scientific innovations to the physicians and patients we serve. We have now exceeded more than 2,000 publications, including ~700 peer reviewed articles and ~180 oral presentations. Yet unlike traditional diagnostics companies, the breadth of our R&D efforts are not limited to the wet lab. We are increasingly publishing and presenting on how we leverage Large Language Models (“LLMs”) in healthcare. Across our diagnostics business we have made significant investments in building out our connected AI platform which allows us to structure large amounts of multi-modal data to provide insights to physicians in near real-time, which in turn has allowed us to become deeply integrated with providers. This flywheel has produced >350 petabytes of connected clinical and molecular data - which has uniquely positioned us to both build our Data business at scale and advance our other AI-enabled applications. Last quarter, we embarked on the journey to build the world’s first large scale multimodal foundation model in oncology, which could produce diagnostic insights that are transformative for precision medicine. There is hope, real hope, that a company like ours might be able to predict who will and won’t respond to a given
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therapy, allowing physicians to personalize care in ways that aren’t possible today. This is, and always has been, our North Star. Data Our Data and services business had continued strong growth in the quarter, delivering $72.8 million in revenue in Q2 2025 versus $53.6 million in Q2 2024, up 35.7% year-over-year, largely driven by our Insights business (data licensing), which grew 40.7% in the quarter. Overall Data and services gross margin was 72.7%. All in, our Data business is performing well, with continued strong growth even at scale - a testament to the inherent value of the products we have brought to market that are resonating with our customers. One of those products, Lens, is worth spending a moment on. We began building Lens ~5 years ago. At the time, it was apparent to us that just having lots of data wasn’t enough. We needed to build tools to both harmonize the data and provide an environment where our customers could build cohorts of interest to interrogate the data to produce the insights necessary to advance their drug discovery and development efforts. In other words, they needed a product that would allow them to make sense of the enormity of our data - that product is Lens. While it is used by many of our data clients in oncology, in Q2 we were tasked by Northwestern University’s Feinberg School of Medicine to expand the product into Alzheimer's. That exciting work is now underway. In addition, as we discussed last quarter, in April we signed a 3 year, $200 million data licensing and model development agreement with AstraZeneca and Pathos, to build what we believe is the largest foundation model that’s ever been built in oncology. We have procured a GPU cluster of ~1,000 H200s that is dedicated to this project and we are well into pre-training of the model now, with the first version expected in early 2026. As our deal to build this model is non-exclusive, we are in conversations with others who may want to build similar models. It’s hard to overstate the value of this project. I truly believe the model will be transformative across our entire business, both Genomics and Data, with catalytic effects that make even the most hyperbolic predictions seem understated. One of the most exciting applications for AI is healthcare, and at present we seem to be perfectly situated, given our vast database, real time connections to thousands of providers, and the breadth of our technical expertise.
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Apps Our Apps product line primarily consists of applications that we build and deploy through our connected network of >4,500 sites. While we made progress across all of our main products (Next - closing care gaps in real-time, TIME - matching patients to trials in real-time, and Algos - deploying purely algorithmic diagnostics in real-time), I will hit a few highlights. Next: As part of our Next product, we launched a suite of care gap algorithms in lung cancer, such as EGFR testing, across multiple health systems. Next uses AI to comb through multimodal patient records in real-time and identifies patients who are not receiving guideline directed care. That program was successful at launch, and is now being expanded to additional systems. In addition, we added a second indication, so the program will now cover both lung and breast cancer. As these algorithms run automatically on data we already have, there is very little cost to run them. As such, this business (along with Algos) has margins even higher than our data business. Algos: We have numerous efforts in oncology, cardiology, radiology, and pathology to build and run purely algorithmic diagnostics. In July, we were awarded FDA approval for our second ECG algorithmic product, which predicts LowEF from a standard electrogram. As we now have approval for both LowEF and AFIB, our cardiac portfolio is taking shape. And given that we run >100 million ECG’s a year in the US alone, and CMS reimburses these types of algos at a stated rate of $128/algorithm, it has the potential to be significant. So while still early, we’re super excited, and working on plans to scale this business over time. Summary The business is performing well, which makes my job (and writing this letter) a pleasure. At moments like this, as a CEO, one of my jobs is to keep the “train on the track,” given the strong forward momentum. I am envious of companies like Amazon, who upon achieving a billion dollars of annual revenue 25 years ago maintained a compounded annual growth thereafter of roughly 25%. It’s easy for small things to grow, much harder when they get to scale. Like Amazon, we want sustained growth rates of roughly 25%. To the extent we can influence this outcome, and make decisions that are better for the long term, we will. Finally, I want to acknowledge that we serve two primary constituencies - our shareholders and our patients. While these letters focus solely on the former, it is not lost on us that as leaders in bringing AI to healthcare we owe a duty to the latter. We have long believed that the
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best way to build a great business, and true shareholder value, is by helping patients live longer and healthier lives. As we sit on the precipice of releasing our first foundation model, that is clearer to us than ever. A word from our CFO Overall, we are pleased with the financial results of the second quarter - which were ahead of our expectations. We experienced significant year-over-year growth in each of our product lines: Genomics and Data and services. Margins continue to improve year-over-year and we continue to demonstrate leverage in the business as we advance towards our goal of being Adjusted EBITDA positive for full year 2025. As with last quarter, we are providing each of gross profit, gross margin, and operating expenses on a Non-GAAP basis to exclude stock compensation expense and related payroll taxes. See “Non-GAAP Financial Measures” below.
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Second Quarter 2025 Financial Results Three months ended June 30, 2025 2024 Change (in thousands, except percentages) (unaudited) GAAP Results Revenue $ 314,635 $ 165,969 89.6% Genomics gross margin 58.8% 39.2% 1,960 bps Data and services gross margin 72.7% 58.7% 1,400 bps Operating expenses $ 256,813 $ 609,005 NM (1) Net loss $ (42,843) $ (552,212 ) NM (1) Non-GAAP Results Non-GAAP Genomics gross margin 59.4% 49.4% 1000 bps Non-GAAP Data and services gross margin 73.9% 72.4% 150 bps Non-GAAP Operating expenses $ 214,557 $ 134,742 59.2% Adjusted EBITDA $ (5,580) $ (31,186) 82.1% _______________ (1) Not meaningful due to the impact of stock compensation expense and related employer payroll tax related to stock-based compensation associated with the initial public offering in June 2024 Revenue Our Q2 2025 revenues were $314.6 million, representing 89.6% yea r-over-year growth. Excluding legacy Ambry revenues, the core Tempus business grew 30.9%.
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Our Q2 2025 Genomics revenues were $241.8 million, representin g 115.3% yea r-over-year growth, largely driven by re-acceleration of growth in our Oncology business and the addition of Ambry (which we refer to as “Hereditary”). Oncology experienced 32.9% year-over-year revenue growth on ~26% volume growth, of which ~1.5% related to MRD testing. Oncology average reimbursement was approximately $1,580 in the quarter, consistent with Q1 2025. While we continue to see xT volumes migrating to xT cDx (approximately 28% of total xT reports in the quarter), there is still work to be done to get to our 40% target by year end. Given our testing platform is so connected to EHR systems, updating our testing menu takes time to roll out and we are mindful of not disrupting our current positive customer experience by rushing the transition. In addition, we have accelerated sales efforts for several of our products with lower reimbursement (namely xG and xM), which are a small drag on ASP. The combination of both held our ASP largely flat in the quarter, although overall margins improved. Hereditary contributed $97.3 millio n of revenue on ~128,000 tests delivered in Q2 2025, compared to $72.8 million of pro forma 2 revenue and ~97,000 tests in Q2 2024. This represents year-over-year revenue growth of 33.6% and 32% volume growth. From a volume perspective, Ambry continued to see tailwinds from winning over accounts from competitors, along with increasing share of wallet within existing accounts. Average reimbursement was $760 in Q2 2025, up slightly from Q2 2024. Our Q2 2025 Data and services revenues were $72.8 million, representing 35.7% year-over-year growth, largely driven by strong growth in our Insights (data licensing) business - which grew 40.7% year-over-year. This growth is largely the result of us delivering on previously signed agreements, including the foundation model project with AZ and Pathos announced in April. Given that most of our data licensing revenue comes from long-term subscriptions, we have good visibility into our expected data licensing revenues for the balance of the year. Gross Profit We generated $195.0 million of gross profit in the quarter. Non-GAAP gross profit was $197.5 million in Q2 2025, representing an aggregate Non-GAAP gross margin of 62.8%. This was a 600 basis point improvement year-over-year, largely the result of increased margins in our Genomics business through ASP improvements, efficiencies in our labs, and the addition of Ambry, along with growth in our Data and services product line, which operates at a higher margin. 2 The pro forma amounts have been calculated after applying the Company's accounting policies
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Our Non-GAAP gross margin for our Genomics business was 59.4% in Q2 2025 compared to 49.4% in Q2 2024 as a result of increases in average reimbursement per test and the addition of Ambry. Our Non-GAAP gross margin for the Data and services business was 73.9% in Q2 2025, compared to 72.4% in Q2 2024, again highlighting the year-over-year growth in the Insights business. Operating Expenses Operating expenses for the quarter were $256.8 million compared to $609.0 million in Q2 2024. The year-over-year decrease is largely the result of stock compensation and employer payroll tax related to stock-based compensation recognized in Q2 2024 relating to the IPO. Non-GAAP operating expenses were $214.6 million in Q2 2025 compared to $134.7 million in Q2 2024. The primary difference between GAAP and Non-GAAP relates to stock based compensation and employer payroll tax related to stock-based compensation, amortization of intangibles associated with the Ambry transaction, and acquisition costs. The year-over-year increase is mostly attributable to the addition of Ambry’s operating expenses, along with modest investments in the business commensurate with our growth, and increased professional services fees in the quarter. Our expenses are broken down into three categories: Non-GAAP technology expense, was $30.7 million, Non-GAAP research and development expense, was $39.0 million, and Non-GAAP selling, general and administrative expense was $144.8 million. Adjusted EBITDA and Net Loss Adjusted EBITDA for the quarter was ($5.6) million, c ompared to ($31.2) million in Q2 2024, an improvement of $25.6 million year-over-year. We plan on continuing to evaluate the level of investment we make in the business based on increases in gross profit dollars, such that we anticipate continued improvement in Adjusted EBITDA throughout the year. Net loss for the quarter was ($42.8) millio n, including fair value gains of $37.8 million related to our marketable equity securities and stock compensation and employer payroll tax related to stock-based compensation of ($24.3) million. Adjusting for stock compensation, stock-based compensation-related employer payroll taxes and other non-operating items, Non-GAAP net loss for the quarter was ($37.3) million compared to ($51.9) million for Q2 2024.
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Cash and Other Items We finished the quarter with ~$293.0 million of cash, cash equivalents, and marketable securities, an increase of ~$70 million over last quarter. In early July, we issued $750 million of convertible senior notes. The notes have a coupon of 0.75% and a call premium of 32.5% (which was increased to 75% through the purchase of a capped call). Post the convertible offering, we paid down ~$290 million of existing debt / accrued interest / make-whole premium, as well as approximately $70 million of transaction-related fees and commissions, including the capped call, increasing our cash balance by an additional ~$390 million post quarter end. Given we have become eligible to do so, we also filed a shelf registration statement today, following the filing of our 10-Q. As part of the shelf registration, we have established an at-the-market (ATM) equity offering program, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $500 million. While we have no immediate needs for capital, the program gives us the flexibility to raise capital opportunistically and efficiently in the future, if we so choose. Additionally, we announced that we have officially redomiciled the company from Delaware to Nevada effective August 8th, an item that was previously approved at the shareholder meeting in May. Guidance W e are increasing our guidance and now expect to finish 2025 with approximately $1.26 billion in revenue, and approximately $5 million in Adjusted EBITDA. Similar to previous years, we would anticipate revenues to continue to grow during the year, with the fourth quarter being the largest given the seasonality we typically experience in the data business. Given the unique nature of our business, it’s difficult to predict these numbers with complete accuracy; as such, the word approximately implies a modest range. Thanks for your support and for joining on this journey, Eric & Jim
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Forward Looking Statements This letter contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about Tempus AI, Inc. (“Tempus”) and its industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this letter are forward-looking statements, including, but not limited to, Tempus’ expected financial results for full year 2025, expectations concerning the growth of Tempus’ business, including Hereditary; the impact of pricing and reimbursement actions on Tempus’ financial results; the expectation that the collaborations with AstraZeneca and Pathos AI will result in the largest multimodal foundation model in oncology; and the impact of the foundation model on Tempus’ business; the potential application and impact of AI in healthcare; Tempus’ ability to scale the Algos business; Tempus’ expectations regarding long term sustained growth rates for Tempus’ business; the contributions of Tempus’ research and findings to the larger scientific community and the use of Tempus’ products and services to advance clinical care for patients. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Tempus cautions you that the foregoing may not include all of the forward-looking statements made in this letter. You should not rely on forward-looking statements as predictions of future events. Tempus has based the forward-looking statements contained in this letter primarily on its current expectations and projections about future events and trends that it believes may affect Tempus’ business, financial condition, results of operations and prospects. These forward-looking statements are subject to risks and uncertainties related to: the intended use of Tempus’ products and services; Tempus’ financial performance; the ability to attract and retain customers and partners; managing Tempus’ growth and future expenses; competition and new market entrants; compliance with new laws, regulations and executive actions, including any evolving regulations in the artificial intelligence space; the ability to maintain, protect and enhance Tempus’ intellectual property; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures or investments, including our ability to realize the expected benefits of the acquisition of Ambry Genetics and Deep6 AI; the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, trade tensions and tariffs, and war or other armed conflict, as well as risks, uncertainties, and other factors described in the section titled “Risk Factors” in Tempus’ Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC) on February 24, 2025, as supplemented by Tempus’ Form 10-Q
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for the quarter ended June 30, 2025, filed with the SEC on August 8, 2025, as well as in other filings Tempus may make with the SEC in the future, In addition, any forward-looking statements contained in this letter are based on assumptions that Tempus believes to be reasonable as of this date. Tempus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this letter or to reflect new information or the occurrence of unanticipated events, except as required by law. Non-GAAP Financial Measures In addition to the financial information presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Tempus also presents adjusted EBITDA, non-GAAP net loss, and non-GAAP operating expenses (collectively, the “non-GAAP financial measures”). For definitions of each of these non-GAAP financial measures, as well as reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure, please see the section titled “Non-GAAP Financial Measures” in Tempus’ second quarter earnings release and the tables accompanying such release, which can be found on Tempus’ investor relations website at this link. Tempus does not provide guidance for net loss, the most directly comparable GAAP measure to Adjusted EBITDA, and similarly cannot provide a reconciliation between its forecasted Adjusted EBITDA and net loss without unreasonable effort due to the unavailability of reliable estimates for certain components of net income and the respective reconciliations. These forecasted items are not within Tempus’ control, may vary greatly between periods and could significantly impact future financial results.