Core Insights - Tempus AI's third-quarter 2025 results indicate a significant growth in its Insights and Data & Services business, which is becoming a high-margin revenue stream beyond traditional genomic testing [1][8] - Data and Services revenues reached $81.3 million, reflecting a 26.1% year-over-year increase, primarily driven by Insights (data licensing) [1][8] Business Performance - Insights bookings amounted to $150 million, showcasing a 37.6% year-over-year revenue growth, supported by a substantial foundation model deal signed earlier this year [2] - The company is effectively monetizing its extensive multimodal dataset, which includes genomic, clinical, imaging, and digital pathology information, alongside AI-powered insights and algorithms [2] Strategic Developments - Tempus enhanced its data and AI capabilities through the acquisition of Paige, a leader in digital pathology, which improves its dataset and technical expertise [3] - The collaboration with Northwestern Medicine has been expanded to integrate David, Tempus' generative AI clinical co-pilot, into the EHR platform, aiming to streamline clinical workflows [3] - Tempus Next has broadened its focus into breast cancer, providing real-time insights to assist clinicians in closing guideline-based care gaps [3] Market Position - Tempus is transitioning from a diagnostics-focused company to a differentiated data-driven precision medicine platform, with increasing potential for recurring revenue [4] - Over the past year, Tempus shares have increased by 10%, outperforming the industry, which saw a 4.1% decline [7] Valuation Metrics - Tempus currently trades at a forward 12-month Price-to-Sales (P/S) ratio of 8.18X, compared to the industry average of 5.81X, indicating a relatively expensive valuation [9]

Industry Overview - The healthcare landscape is evolving due to technological advances, policy shifts, and rising patient expectations, marking a pivotal moment for innovation and transformation in the industry [1] - Key trends include precision medicine, AI integration, and enhanced cybersecurity, emphasizing personalized care, operational efficiency, and system-wide resilience [1] Company Performance Tempus AI (TEM) - Tempus reported its first positive adjusted EBITDA of $1.5 million in Q3 2025, driven by strong top-line performance and disciplined operational execution [4][9] - The Genomics business saw a 33% year-over-year volume increase, with Oncology testing growing by 27% and Hereditary testing by 37% [5] - Data Licensing (Insights) business grew by 38% during the quarter, securing $150 million in new total contract value [6] - Cost discipline and efficiency efforts contributed to margin expansion, with adjusted EBITDA potentially reaching $4 million without acquisition-related expenses [7] Butterfly Network (BFLY) - Butterfly Network achieved year-over-year revenue growth while reducing cash burn, with U.S. revenues slightly increasing to $16.1 million [10] - International revenues rose by 4% year-over-year to $5.4 million, driven by higher pricing following the iQ3 launch [11] - The company reported a normalized cash burn of $3.9 million, reflecting improved operational efficiency while still investing in long-term growth areas [12] - Despite a negative adjusted EBITDA loss of $8.1 million and a gross margin of -17.5%, operational improvements were noted [13] Valuation Metrics - Tempus is trading at a forward price-to-sales (P/S) ratio of 8.18, while Butterfly Network's forward sales multiple is 6.45, indicating a discount to Tempus [14] - For 2025, the projected loss per share for Tempus is 65 cents, an improvement from the previous year's loss of $1.58 [15] - Butterfly Network's projected loss per share is 15 cents, compared to a prior-year loss of 34 cents, with stable estimates over the past 30 days [16] Investment Outlook - Tempus is viewed as the stronger investment choice due to its positive adjusted EBITDA and balanced growth across business segments [18] - Butterfly Network, while still not profitable, shows resilience and operational efficiency, making it a potential value play for investors willing to accept higher risk [19]

Core Insights - Tempus AI reported positive adjusted EBITDA of $1.5 million in Q3, marking a significant milestone after ten years of efforts, driven by strong performance across major business segments and disciplined operational execution [1][9] Genomics Business Performance - The Genomics segment experienced a 33% year-over-year increase in total volumes, with Oncology testing growing by 27% and Hereditary testing rising by 37%, indicating broad-based strength across nearly all assays offered [2][9] Operational Efficiency and Sales Force Stabilization - Following earlier disruptions from team restructuring related to the MRD portfolio, the company has spent several quarters retraining and stabilizing its sales force, which has now become more efficient and fully trained, leading to improved execution [3] Data Licensing Growth - The Data Licensing (Insights) business grew by 38% during the quarter, securing $150 million in new total contract value from multiple significant agreements [3][9] Cost Discipline and Margin Expansion - Tempus highlighted ongoing cost discipline and efficiency efforts that contributed to margin expansion, achieving positive adjusted EBITDA despite incurring several million dollars in incremental expenses from the Paige acquisition, which was completed mid-quarter [4][9] Peer Comparison - Myriad Genetics reported adjusted EBITDA of $10.3 million in Q3 2025, with a full-year forecast of $27-$33 million, driven by a 70.1% adjusted gross margin and controlled discretionary spending [5] - Quest Diagnostics showed stronger profitability in Q3, with gross and operating margins expanding by 110 and 132 basis points, respectively, while targeting 3% annual cost savings through its Invigorate program [6] Stock Performance - Over the past year, Tempus AI shares have increased by 26.7%, outperforming the industry growth of 12.3% and the S&P 500 composite's 16.4% improvement [7] Valuation Metrics - Tempus AI currently trades at a forward 12-month Price-to-Sales (P/S) ratio of 8.00X, compared to the industry average of 5.81X, indicating an expensive valuation [10] Earnings Estimates - In the past 30 days, the loss per share estimate for Tempus AI for 2025 has narrowed by 3 cents, with current estimates at -$0.05 for the current quarter and -$0.65 for the current year [11][12]

Group 1 - Tempus AI, Inc. is recognized as one of the top digital health stocks to invest in, with positive sentiment from Wall Street following its Q3 results [1] - The company's Q3 performance was driven by a significant increase in oncology test volumes by approximately 27% and a surge in hereditary testing, leading to total genomics revenue of around $253 million and overall sales of $334 million [2] - Management has raised its full-year guidance due to the durability of growth levers, despite GAAP results remaining negative due to stock compensation and other costs [2][3] Group 2 - Canaccord Genuity maintained a Buy rating on Tempus AI but slightly reduced its price target from $110 to $95, citing the potential for AI deployment in clinical practice to drive long-term revenue growth [1] - The company's gross profit reached approximately $210 million, and adjusted EBITDA turned positive, indicating improved financial health [2] - Tempus AI applies artificial intelligence to clinical and molecular data, focusing on personalizing treatment, particularly in oncology, and aims to expand its technology across various diseases [3]

Core Insights - The article discusses the potential for investors to identify undervalued stocks that are mispriced by the market during Q4 [1] Group 1: Company Overview - Stone Fox Capital is an RIA based in Oklahoma, led by Mark Holder, a CPA with 30 years of investing experience, including 15 years as a portfolio manager [2] - The investing group "Out Fox The Street" provides stock picks and in-depth research aimed at uncovering potential multibaggers while managing portfolio risk through diversification [2] Group 2: Features and Offerings - The group offers various model portfolios, stock picks with identifiable catalysts, daily updates, real-time alerts, and access to community chat and direct communication with Mark for inquiries [2]

Core Insights - The article discusses the potential for undervalued stocks that are mispriced by the market during Q4, suggesting that investors may benefit from joining the investment group Out Fox The Street for insights and stock picks [1]. Group 1: Company Overview - Stone Fox Capital is identified as a Registered Investment Advisor (RIA) based in Oklahoma, led by Mark Holder, a CPA with extensive experience in investing and portfolio management [2]. - Mark Holder has 30 years of investing experience, including 15 years as a portfolio manager, and leads the investing group Out Fox The Street [2]. Group 2: Investment Strategy - The investment group offers various features such as model portfolios, stock picks with identifiable catalysts, daily updates, real-time alerts, and community chat for direct interaction with Mark Holder [2].

Core Insights - Tempus AI is strengthening its position in the genomics sector with recent FDA clearances and new product launches [1][8] - The company is developing a companion diagnostic test in collaboration with Verastem Oncology, which is currently in clinical trials [3][8] - Tempus plans to introduce a whole-genome sequencing test next year, anticipating further growth due to regulatory advancements [4][8] Product Developments - In September 2025, Tempus received FDA 510(k) clearance for its xR IVD, a next-generation sequencing-based diagnostic device [1] - The company launched the xM assay for Treatment Response Monitoring, aimed at tracking tumor fraction changes in patients on immune-checkpoint inhibitor therapy [2] - Tempus is working on a companion diagnostic test with Verastem, leveraging its xT CDx assay in ongoing clinical trials [3] Market Position and Performance - Tempus AI shares have increased by 20% over the past year, outperforming the industry growth of 11.1% and the S&P 500's 17.5% [7] - The company is expected to benefit from the introduction of its Xh whole-genome sequencing test and ongoing reimbursement progress for MRD [4][8] Competitive Landscape - Exact Sciences launched its Cancerguard multi-cancer early detection test and is seeing strong uptake of its Oncotype DX genomic test [5] - Guardant Health expanded its Shield product for multi-cancer detection and received new companion diagnostic approvals [6] Valuation Metrics - Tempus AI currently trades at a forward Price-to-Sales ratio of 8.13, higher than the industry average of 5.81 [9] - The company's loss per share estimate for 2025 has improved by 3 cents over the past 60 days [10]

Core Insights - Tempus AI is participating in the 2025 Stifel Healthcare Conference, indicating its active engagement in the healthcare sector [1] Company Overview - Jim Rogers, the CFO of Tempus AI, is representing the company at the conference, highlighting the importance of leadership presence in investor relations [1]

Summary of Tempus AI Conference Call Company Overview - **Company**: Tempus AI - **Industry**: Life Sciences and Diagnostics Key Points AI Integration in Diagnostics and Biopharma - Tempus AI leverages AI across its operations, focusing on enhancing patient care through data and technology [4][5][6] - The company has developed platforms like Hub and Lens to facilitate interaction with diagnostic tests and build patient cohorts, respectively [4][5] - A partnership with AstraZeneca and Pathos aims to create a foundation model to extract insights from large datasets [6] Financial Performance - The third quarter reported a **28% organic growth**, with specific segments showing: - **Genomics**: High 20s growth - **Ambry**: 33% growth - **Data Licensing**: 37% growth [10][12] - Adjusted EBITDA turned positive, marking a significant milestone for the company [13] Oncology and Hereditary Testing - Oncology volumes grew by **27%**, while Ambry benefited from market disruptions in hereditary screening [12][42] - The hereditary testing market is expected to moderate as share gains stabilize [12] Data Licensing and Contracts - Total remaining contract value exceeded **$1 billion**, with a net revenue retention rate of **140%** [48] - New contracts included a **$66 million deal** with a biotech customer and expansions with existing clients [48] - The company anticipates strong engagement from both big pharma and biotech sectors [48] Market Position and Competition - Tempus AI has established connections with over **5,000 institutions**, enhancing its data collection and diagnostic capabilities [19] - The company emphasizes ease of use and connectivity as key differentiators against competitors [20] Reimbursement Trends - Average Selling Prices (ASPs) have increased to approximately **$1,600**, with expectations for **40%** of xT volumes to transition to ADLT pricing by year-end [22][23] - The company aims for **85%** of xT volumes to shift to ADLT pricing by the end of 2026 [23] Clinical Trials and CRO Business - The CRO segment has faced headwinds, but the acquisition of a small CRO aims to enhance clinical trial matching capabilities [61] - The company does not prioritize aggressive growth in the CRO sector but sees potential stabilization as funding for CROs improves [61] Investment and Growth Strategy - Tempus AI plans to reinvest about **two-thirds** of incremental gross profit back into the business over the next three years to support growth [64] - The company aims for long-term growth rates of **25-30%**, focusing on sustainable growth rather than maximizing quarterly revenue [58][64] Gross Margins and Future Outlook - Genomics business margins are expected to stabilize around **low 60%**, while data operations may achieve **mid 70%** margins [66] - AI applications, though currently a small revenue source, are anticipated to positively impact margins as they scale [68] Upcoming Developments - Data from a new ultra-high sensitivity assay for MRD is expected in **2026**, with further developments in breast cancer and immuno-oncology to follow in **2027** [38][39] Additional Insights - The company is cautious about the competitive landscape in MRD testing, focusing on leveraging existing data connections and insights to gain market share [34][35] - Tempus AI's strategy emphasizes long-term relationships with clients to ensure sustained growth and value delivery [58][59]

Group 1 - Tempus AI has been a focal point in discussions regarding AI trends, with its name potentially influencing investor perceptions [1] - Despite skepticism, Tempus AI has demonstrated effective execution in its operations [1]