Core Viewpoint - Tempus AI stock has surged by 10% in the past week due to strong quarterly results and an optimistic sales forecast, predicting an 82% year-over-year sales increase to approximately $126 million, contributing to a nearly 80% year-to-date rise in shares [2][3] Group 1: Financial Performance - Tempus AI's revenues have shown significant growth, with quarterly revenues increasing by 89.6% to $315 million from $166 million year-over-year, compared to a 4.3% increase for the S&P 500 [7] - The company has experienced an average revenue growth rate of 53.6% over the past three years, significantly outpacing the S&P 500's 5.2% growth [7] - Operating income for Tempus AI over the last four quarters was -$235 million, resulting in an operating margin of -25%, while the S&P 500 had an operating margin of 18.4% [12] - The net income for the last four quarters was -$200 million, leading to a net income margin of -21%, compared to 12.3% for the S&P 500 [12] Group 2: Valuation Metrics - Tempus AI has a price-to-sales (P/S) ratio of 10.9, significantly higher than the S&P 500's ratio of 3.0, indicating a premium valuation [7] - Despite the high valuation multiple, the strong revenue growth justifies this premium, as seen in comparisons with other fast-growing companies [9] Group 3: Financial Stability - Tempus AI's balance sheet is robust, with a debt of $527 million against a market capitalization of $10 billion, resulting in a low debt-to-equity ratio of 5% compared to 24.1% for the S&P 500 [12] - Cash and cash equivalents amount to $291 million out of $1.6 billion in total assets, yielding a strong cash-to-assets ratio of 17.9%, compared to 6.7% for the S&P 500 [12] Group 4: Investment Consideration - Given the favorable momentum and strong operational performance, Tempus AI stock is considered a compelling investment at its current price of approximately $65 [3][9] - The company is expected to continue its growth trajectory, despite its current valuation being higher than the broader market [9]

Core Viewpoint - The Tempus AI class action lawsuit alleges that the company and its executives made misleading statements and failed to disclose critical information regarding its financial practices and operations, leading to significant stock price declines [3][4]. Group 1: Allegations Against Tempus AI - The lawsuit claims that Tempus AI inflated the value of contract agreements, many of which were with related parties and included non-binding opt-ins or were self-funded [3]. - Concerns were raised about the credibility of Tempus AI's joint venture with SoftBank Group Corporation, suggesting it created an appearance of "round-tripping" capital to inflate revenue [3]. - The business model of Ambry Genetics Corporation, acquired by Tempus AI, is alleged to be based on aggressive and potentially unethical billing practices, risking scrutiny and sustainability [3]. - AstraZeneca PLC reportedly reduced its financial commitments to Tempus AI through a questionable "pass-through payment" arrangement, raising further concerns about the company's financial health [3]. - These issues collectively indicate weaknesses in Tempus AI's core operations and revenue prospects [3]. Group 2: Impact of Research Report - On May 28, 2025, a research report from Spruce Point Capital Management raised numerous red flags regarding Tempus AI's management, operations, and financial reporting, resulting in a stock price drop of over 19% [4]. Group 3: Class Action Process - The Private Securities Litigation Reform Act of 1995 allows any investor who purchased Tempus AI common stock during the specified Class Period to seek appointment as lead plaintiff in the class action lawsuit [5]. - The lead plaintiff is typically the investor with the greatest financial interest in the case and acts on behalf of all other class members [5]. - Investors can choose their own law firm to represent them in the lawsuit, and participation as lead plaintiff does not affect the ability to share in any potential recovery [5].

Core Insights - Tempus AI's second-quarter results exceeded Wall Street expectations, leading to increased investor confidence [2][5] - The company raised its full-year sales guidance following strong performance in Q2 [2][6] Financial Performance - Tempus AI reported an adjusted loss of $0.22 per share on revenue of $314.6 million for Q2, outperforming analyst estimates of a $0.25 loss on $297.8 million in sales [4] - Sales increased approximately 90% year over year, driven by strong growth in the genomics segment [5] Future Outlook - The company now expects full-year revenue to reach approximately $1.26 billion, indicating an annual sales growth of around 86% [6] - Tempus AI anticipates adjusted EBITDA of $5 million for the year, reflecting a $110 million improvement over the previous year's performance [7]

Core Insights - Tempus AI reported $314.64 million in revenue for the quarter ended June 2025, marking an 89.6% year-over-year increase [1] - The EPS for the same period was -$0.22, an improvement from -$0.63 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $299.32 million by 5.12% [1] - The company also delivered an EPS surprise of 4.35%, compared to the consensus estimate of -$0.23 [1] Financial Performance Metrics - Net Revenue from Data and Services was $72.79 million, slightly below the four-analyst average estimate of $73.93 million [4] - Net Revenue from Genomics reached $241.84 million, surpassing the four-analyst average estimate of $224.3 million [4] - Non-GAAP Gross Profit from Genomics was $143.76 million, exceeding the three-analyst average estimate of $129.5 million [4] - Non-GAAP Gross Profit from Data and Services was $53.76 million, slightly above the average estimate of $53.46 million based on three analysts [4] Stock Performance - Tempus shares have returned -1.4% over the past month, while the Zacks S&P 500 composite increased by 1.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Tempus AI, Inc. reported a narrower adjusted loss of 22 cents per share for Q2 2025, beating the Zacks Consensus Estimate by 4.35% [1][8] - Revenues reached $314.6 million, exceeding expectations by 5.12% and showing an 89.6% year-over-year increase [2][8] Revenue Breakdown - Genomics segment generated $193.8 million in revenues, a 115.3% increase year-over-year, with oncology testing contributing $133.2 million (up 32.9%) and hereditary testing $97.3 million (up 33.6%) [3][8] - Data and Services product line reported $72.8 million in sales, reflecting a 35.7% year-over-year growth, driven by a 40.7% increase in data licensing [4] Margin Performance - Gross profit for the quarter was $195 million, up 158.3% from the previous year, with an adjusted gross margin of 62%, expanding by 1649 basis points despite a 32.2% rise in costs [5] Liquidity Position - At the end of Q2 2025, the company had cash and cash equivalents of $186.3 million, an increase from $151.6 million at the end of Q1 [6] - Cumulative net cash used in operating activities was $61.46 million, significantly reduced from an outflow of $198.5 million in the prior year [6] Full-Year Outlook - Updated guidance for 2025 projects revenues of approximately $1.26 billion, indicating nearly 82% annual growth, with adjusted EBITDA expected to improve by approximately $110 million over 2024 [7] Stock Performance - Following the earnings announcement, shares of Tempus AI rose by 2.2% in pre-market trading, reflecting positive market sentiment [2][9]

Financial Data and Key Metrics Changes - Revenue increased by 89.6% to $314.6 million, with Genomics revenue rising 115% to $241.8 million driven by volume growth in oncology [4][5] - Quarterly gross profit reached $195 million, reflecting a 160% increase, while adjusted EBITDA improved from negative $16 million to negative $5.6 million [5][6] - Full year 2025 revenue guidance was raised to $1.26 billion, with an adjusted EBITDA forecast of approximately $5 million, indicating a $110 million improvement over the previous year [6] Business Line Data and Key Metrics Changes - Genomics revenue growth was primarily attributed to oncology volume growth, which increased from 20% to 26% [4] - Data and Services revenue grew by 35.7% to approximately $73 million, led by a 41% increase in data licensing from Incyte [5] Market Data and Key Metrics Changes - Significant sequential volume growth was observed across the entire oncology testing compendium, with hereditary volumes also exceeding expectations [12][14] - The company is capturing market share from historical players who have reduced their presence in the market, indicating strong tailwinds in the overall space [15] Company Strategy and Development Direction - The company is focused on maintaining growth while approaching adjusted EBITDA breakeven, with plans to continue investing in growth opportunities [6][43] - There is a strong emphasis on AI and data integration into diagnostics, with expectations that this will transform R&D portfolios and patient care [49][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of growth, highlighting the importance of long-term strategies over short-term gains [97] - The company anticipates that reimbursement for MRD (Minimal Residual Disease) testing will occur in 2026, which is expected to significantly boost volumes [58][90] Other Important Information - The company issued $750 million of 0.75% convertible notes to reduce interest expenses and improve cash flow [6] - The data business is expected to grow at around 30% for the year, with Q4 typically being the largest revenue quarter [62] Q&A Session Summary Question: Can you elaborate on the strong core genomic volumes in the quarter? - Management noted significant sequential volume growth across oncology testing, driven by sales force efficiencies and technology improvements [12][13] Question: How should we think about the cadence of ASP as you migrate volumes to CDx? - ASPs are expected to see incremental gains as the company approaches its target of migrating 40% of XT volume to CDx by year-end [22] Question: Can you discuss bookings trends for Insights and Trials? - Bookings were strong due to the AstraZeneca Pathos deal, with total contract value up materially [30] Question: What is the pipeline for future partnerships with pharma? - The pipeline remains robust, with no significant pressure from competitors, and the company expects to close large deals in the future [39] Question: How do you balance investments among various parts of the business? - The company aims to maintain discipline in investments while focusing on long-term growth and adjusted EBITDA positivity [43][86] Question: What are the expectations for the back half of the year in the data business? - The data business is expected to grow slightly above 30% for the year, with Q4 anticipated to be the largest revenue quarter [62] Question: How is the liquid biopsy business performing? - The liquid biopsy franchise is growing faster than the market, with a competitive product set [68][70] Question: What is the company's appetite for acquisitions or partnerships? - The company remains opportunistic but disciplined in pursuing acquisitions that align with its strategic goals [78][80] Question: How significant will MRD be in the oncology volumes? - MRD is expected to become a larger part of the business once reimbursement is secured, which will drive unit growth [90][94]

Company Performance - Tempus AI reported a quarterly loss of $0.22 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.23, and an improvement from a loss of $0.63 per share a year ago, representing an earnings surprise of +4.35% [1] - The company posted revenues of $314.64 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 5.12%, and showing significant growth from $165.97 million in the same quarter last year [2] - Over the last four quarters, Tempus has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - Tempus shares have increased approximately 74% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.18 on revenues of $325.52 million, and for the current fiscal year, it is -$0.67 on revenues of $1.24 billion [7] Industry Outlook - The Medical Info Systems industry, to which Tempus belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Tempus's stock may be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Core Viewpoint - The Tempus AI class action lawsuit alleges that the company and its executives made misleading statements and failed to disclose critical information regarding its financial practices and operations, leading to significant stock price declines [3][4]. Group 1: Allegations Against Tempus AI - The lawsuit claims that Tempus AI inflated the value of contract agreements, many of which were with related parties and included non-binding opt-ins or were self-funded [3]. - It is alleged that the credibility of Tempus AI's joint venture with SoftBank Group was compromised, creating the appearance of "round-tripping" capital to generate revenue [3]. - The business model of Ambry Genetics Corporation, acquired by Tempus AI, is said to be based on aggressive and potentially unethical billing practices, risking scrutiny and sustainability [3]. - AstraZeneca reportedly reduced its financial commitments to Tempus AI through a questionable "pass-through payment" arrangement, raising concerns about the company's revenue prospects [3]. - These issues collectively indicate weaknesses in Tempus AI's core operations and revenue potential [3]. Group 2: Impact of Research Report - On May 28, 2025, a research report from Spruce Point Capital Management raised significant concerns regarding Tempus AI's management, operations, and financial reporting [4]. - Following the release of this report, Tempus AI's stock price experienced a decline of over 19% [4]. Group 3: Class Action Process - The Private Securities Litigation Reform Act of 1995 allows any investor who purchased Tempus AI common stock during the specified class period to seek appointment as lead plaintiff in the lawsuit [5]. - The lead plaintiff represents the interests of all class members and can select a law firm of their choice for litigation [5]. Group 4: About Robbins Geller - Robbins Geller Rudman & Dowd LLP is a prominent law firm specializing in securities fraud and shareholder litigation, having secured over $2.5 billion for investors in 2024 alone [6]. - The firm has been recognized for its significant recoveries in securities class action cases, including the largest recovery in history of $7.2 billion in the Enron case [6].

Financial Performance - Revenue for Q2 2025 increased by 896% year-over-year to $3146 million from $1660 million in Q2 2024[52, 55] - Genomics revenue reached $2418 million, a 1153% increase compared to Q2 2024[55] - Data and Services revenue totaled $728 million, growing 357% year-over-year, with Insights (data licensing) growing 407%[55] - Gross profit improved by 1583% year-over-year, reaching $1950 million in Q2 2025[52, 55] - Adjusted EBITDA improved by 821%, with a loss of $(56) million in Q2 2025 compared to $(312) million in Q2 2024[52, 55] Genomics Business - Oncology testing (Tempus Genomics) revenue was $1332 million, up 329% year-over-year, with approximately 26% volume growth[55] - Hereditary testing (Ambry Genetics) contributed $973 million of revenue, up 336% year-over-year on a pro forma basis, with approximately 32% volume growth[55] - Average reimbursement per hereditary test was $760 in Q2 2025[24] Data and AI - Total Remaining Contract Value for Data and Services was >$940 million at the end of 2024[39] - Data Licensing Retention was ~140% at the end of 2024[39] - Tempus has >350 petabytes of rich multimodal healthcare data[12, 37]

Part I – Financial Information [Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Quarterly%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for Tempus AI, Inc. as of **June 30, 2025**, show significant revenue growth and a narrowed net loss compared to the prior year. The balance sheet expanded considerably due to the Ambry Genetics acquisition, which increased assets, liabilities, and goodwill. Cash flow from operations remained negative, while financing activities were driven by new debt to fund the acquisition, and investing activities reflected the cash used for this purchase [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of **June 30, 2025**, the company's total assets increased to **$1.63 billion** from **$926.1 million** at year-end **2024**, primarily driven by a significant rise in goodwill and intangible assets from the Ambry acquisition. Total liabilities also grew to **$1.32 billion** from **$869.8 million**, largely due to increased long-term debt and a new revolving credit facility used to finance the acquisition. Consequently, total stockholders' equity increased to **$309.6 million** from **$56.3 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $186,310 | $340,954 | | Total current assets | $644,201 | $667,603 | | Goodwill | $325,793 | $73,343 | | Intangible assets, net | $387,564 | $11,716 | | **Total Assets** | **$1,625,365** | **$926,116** | | Total current liabilities | $418,160 | $291,070 | | Long-term debt, net | $471,663 | $267,244 | | Revolving credit facility | $100,000 | $— | | **Total Liabilities** | **$1,315,803** | **$869,777** | | **Total Stockholders' equity** | **$309,562** | **$56,339** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the second quarter of **2025**, Tempus AI reported a **90% year-over-year increase** in total net revenue to **$314.6 million**. The net loss significantly narrowed to **$42.8 million** from **$552.2 million** in **Q2 2024**, primarily because the prior-year period included a substantial one-time stock-based compensation expense related to the IPO. For the six-month period, revenue grew **83%** to **$570.4 million**, and the net loss was reduced to **$110.9 million** from **$617.0 million** Q2 Financial Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenue | $314,635 | $165,969 | 90% | | - Genomics | $241,843 | $112,324 | 115% | | - Data and services | $72,792 | $53,645 | 36% | | Loss from Operations | $(61,774) | $(533,492) | 88% | | Net Loss | $(42,843) | $(552,212) | 92% | | Net Loss Per Share | $(0.25) | $(6.86) | 96% | H1 Financial Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Net Revenue | $570,372 | $311,789 | 83% | | - Genomics | $435,647 | $214,893 | 103% | | - Data and services | $134,725 | $96,896 | 39% | | Loss from Operations | $(130,463) | $(586,766) | 78% | | Net Loss | $(110,880) | $(616,955) | 82% | | Net Loss Per Share | $(0.64) | $(9.02) | 93% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended **June 30, 2025**, net cash used in operating activities was **$61.5 million**, a significant improvement from the **$198.5 million** used in the same period of **2024**. Net cash used in investing activities was **$385.3 million**, primarily for business acquisitions, a sharp contrast to the **$9.0 million** provided by investing activities in the prior year. Net cash provided by financing activities was **$293.0 million**, sourced from new debt facilities, compared to **$502.6 million** in **2024** which was driven by the IPO Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(61,460) | $(198,458) | | Net cash (used in) provided by investing activities | $(385,329) | $8,982 | | Net cash provided by financing activities | $293,042 | $502,631 | | **Net (decrease) increase in Cash** | **$(153,784)** | **$313,065** | - The primary use of cash in investing activities for **H1 2025** was **$380.8 million** for business combinations, net of cash acquired[17](index=17&type=chunk) - Financing activities in **H1 2025** were driven by proceeds from a new revolving credit facility (**$98.0 million**) and long-term debt (**$196.0 million**) to fund acquisitions[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events during the period. Key highlights include the revenue breakdown showing strong growth in both Genomics and Data services, the major acquisition of Ambry Genetics for approximately **$695 million**, the establishment of a joint venture in Japan with SoftBank, and details on the company's substantial debt facilities. The notes also cover subsequent events, including a **$750 million** convertible note offering and an agreement to sell up to **$500 million** in stock through an ATM facility - The company operates as a single operating and reportable segment, with the CEO acting as the chief operating decision maker (CODM)[30](index=30&type=chunk) - The company expects to become a 'large accelerated filer' and no longer qualify as an 'emerging growth company' as of **December 31, 2025**[42](index=42&type=chunk) - On **February 3, 2025**, the company completed its acquisition of Ambry Genetics for consideration of **$375.0 million** in cash and **4.84 million shares** of Class A common stock. Ambry contributed **$97.3 million** in revenue for **Q2 2025**[67](index=67&type=chunk)[68](index=68&type=chunk)[76](index=76&type=chunk) - In **May 2024**, the company formed a 50/50 joint venture, SB Tempus, with SoftBank in Japan, with each party contributing **¥15 billion ($95.2 million)**[93](index=93&type=chunk) - Subsequent to the quarter end, in **July 2025**, the company completed a **$750.0 million** convertible senior notes offering and entered into an 'At the Market' (ATM) sales agreement to offer and sell up to **$500.0 million** of Class A common stock[168](index=168&type=chunk)[177](index=177&type=chunk) - The company reincorporated from a Delaware corporation to a Nevada corporation, effective **August 7, 2025**[29](index=29&type=chunk)[341](index=341&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **90% YoY revenue growth** in **Q2 2025** to increased test volumes in Genomics, driven by both organic growth and the Ambry acquisition, and higher demand for data products. The significant reduction in net loss was primarily due to a large, one-time stock-based compensation expense in **Q2 2024** post-IPO. The company's liquidity was bolstered by new debt to fund the Ambry acquisition and a subsequent **$750 million** convertible note offering in **July 2025**, which management believes provides sufficient capital for over twelve months [Overview](index=48&type=section&id=Overview) Tempus positions itself as a technology company applying AI to healthcare to create 'Intelligent Diagnostics'. Its platform integrates data to support physicians and researchers across three product lines: Genomics, Data, and AI Applications. Recent strategic developments include the acquisition of Ambry Genetics to expand hereditary testing capabilities and major multi-year data and service collaborations with pharmaceutical companies like AstraZeneca, GSK, and Recursion - The company's core strategy is to create 'Intelligent Diagnostics' by applying AI to make laboratory tests more accurate and personal, leveraging its platform that integrates clinical, molecular, and imaging data[187](index=187&type=chunk) - The acquisition of Ambry Genetics expands the company's testing capabilities into new disease categories such as pediatrics, rare disease, immunology, and cardiology[69](index=69&type=chunk)[193](index=193&type=chunk) - The company has established several multi-year strategic collaborations, including a **$220 million** commitment from AstraZeneca, a **$180 million** commitment from GSK, and a **$160 million** agreement with Recursion[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Results of Operations](index=59&type=section&id=Results%20of%20Operations) In **Q2 2025**, total revenue increased **90%** YoY to **$314.6 million**. Genomics revenue grew **115%**, driven by a **26%** increase in Oncology test volume and the addition of **$97.3 million** from the newly acquired Ambry. Data and services revenue rose **36%** due to higher demand for Insights products. Total operating expenses decreased **61%** to **$376.4 million**, primarily because **Q2 2024** included **$488.3 million** in stock-based compensation from IPO-related RSU vesting. Excluding this, underlying operating costs increased due to the Ambry acquisition and business growth Revenue Comparison - Q2 2025 vs Q2 2024 (in thousands) | Revenue Line | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Genomics | $241,843 | $112,324 | $129,519 | 115% | | Data and services | $72,792 | $53,645 | $19,147 | 36% | | **Total Net Revenue** | **$314,635** | **$165,969** | **$148,666** | **90%** | - The increase in Genomics revenue was driven by a rise in Oncology test volume from **~66,500** to **~84,000** and the addition of **~128,000 Hereditary tests** from the Ambry acquisition, which contributed **$97.3 million**[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - The decrease in operating expenses was primarily due to a **$465.7 million** YoY reduction in stock-based compensation expense. **Q2 2024** included a large expense related to RSU vesting upon the company's IPO[232](index=232&type=chunk)[235](index=235&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - Other income (net) was **$41.7 million** in **Q2 2025**, compared to an expense of **$(7.0) million** in **Q2 2024**, primarily driven by a **$41.5 million** increase in income from unrealized gains on marketable equity securities[241](index=241&type=chunk) [Non-GAAP Financial Measure](index=68&type=section&id=Non-GAAP%20Financial%20Measure) The company uses Adjusted EBITDA as a non-GAAP measure to assess operating performance. For **Q2 2025**, the Adjusted EBITDA loss was **$5.6 million**, a significant improvement from the **$31.2 million** loss in **Q2 2024**. For the first six months of **2025**, the Adjusted EBITDA loss was **$21.8 million**, compared to a **$75.1 million** loss in the prior-year period. The improvement reflects revenue growth and operating leverage Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Net loss | $(42,843) | $(552,212) | $(110,880) | $(616,955) | | Adjustments... | ... | ... | ... | ... | | **Adjusted EBITDA** | **$(5,580)** | **$(31,186)** | **$(21,754)** | **$(75,112)** | [Liquidity and Capital Resources](index=69&type=section&id=Liquidity%20and%20Capital%20Resources) As of **June 30, 2025**, Tempus had **$188.1 million** in cash, cash equivalents, and restricted cash. The company has a history of operating losses but has funded operations through equity and debt financing. Subsequent to the quarter, the company raised approximately **$725.9 million** in net proceeds from a convertible senior notes offering in **July 2025**. Management believes current cash, securities, and anticipated cash flows are sufficient to fund operations for more than twelve months - The company had an accumulated deficit of **$2.3 billion** as of **June 30, 2025**[267](index=267&type=chunk) - In **July 2025**, the company completed a private offering of **$750.0 million** in **0.75%** Convertible Senior Notes due **2030**, with net proceeds of approximately **$725.9 million**[191](index=191&type=chunk)[269](index=269&type=chunk) - A portion of the note proceeds was used to repay **$293.5 million** of existing term loans and to pay **$41.8 million** for capped call transactions to reduce potential dilution[192](index=192&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) - The company believes its current cash, marketable securities, and anticipated cash flows will be sufficient to meet requirements for more than twelve months from the report's filing date[269](index=269&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk exposures relate to interest rates, foreign currency, and inflation. Interest rate risk stems from its variable-rate debt facilities. Foreign currency risk is currently insignificant but is expected to grow with international expansion. Inflation risk could adversely affect margins and operating costs, though its impact to date has not been material - The company is exposed to interest rate risk on its **$579.6 million** outstanding debt under its Term Loan and Revolving Credit Facilities[307](index=307&type=chunk) - Foreign currency risk is currently not material as the majority of revenue is generated in the U.S., but this may change with international growth[308](index=308&type=chunk) - Inflation is a potential risk that could impair operating results by increasing raw material and overhead costs[310](index=310&type=chunk) [Controls and Procedures](index=81&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of **June 30, 2025**. There were no material changes to the company's internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of **June 30, 2025**[311](index=311&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[312](index=312&type=chunk) Part II – Other Information [Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several legal matters, including ongoing patent infringement litigation with Guardant Health Inc. filed in **June 2024**. Additionally, a federal securities class-action lawsuit was filed against the company and its officers in **June 2025**. The company has also received and responded to government inquiries, including a Civil Investigative Demand from the U.S. Attorney's Office for the Eastern District of New York related to compliance with healthcare laws - The company is engaged in patent litigation with Guardant Health Inc., with complaints and counterclaims filed by both parties regarding alleged infringement and false advertising[320](index=320&type=chunk) - A federal securities class-action lawsuit was filed in **June 2025**, alleging false or misleading statements between **August 2024 and May 2025**. The company believes the complaint is without merit[321](index=321&type=chunk) - The company received a Civil Investigative Demand (CID) from the U.S. Attorney's Office in **March 2024** related to compliance with the False Claims Act and Anti-Kickback statute, and has been producing documents in response[318](index=318&type=chunk) [Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) The company highlights new risks associated with its **July 2025** issuance of **$750.0 million** in convertible senior notes. These risks include potential adverse effects on financial condition if the conditional conversion feature is triggered, dilution to stockholders upon conversion, and counterparty risk related to the associated capped call transactions designed to limit dilution - New risks have emerged related to the **July 2025** issuance of **$750.0 million** in **0.75%** Convertible Senior Notes due **2030**[325](index=325&type=chunk) - Risks associated with the notes include potential dilution to stockholders, downward pressure on the stock price, and the requirement to pay cash upon conversion, which could affect liquidity[326](index=326&type=chunk)[328](index=328&type=chunk) - The company is subject to counterparty credit risk with the financial institutions involved in the associated capped call transactions, which could lead to greater than anticipated dilution if a counterparty defaults[331](index=331&type=chunk)[332](index=332&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=85&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the quarter. The company details the use of proceeds from its Initial Public Offering (IPO) in **June 2024**, which generated net proceeds of **$382.0 million**. A portion of these funds was used to satisfy tax withholding obligations for RSU settlements and for general working capital - The company completed its IPO on **June 17, 2024**, selling **11,100,000 shares** of Class A common stock at **$37.00 per share**, resulting in net proceeds of **$382.0 million**[335](index=335&type=chunk) - A portion of the IPO proceeds was used to satisfy tax withholding and remittance obligations related to the net settlement of employee RSUs[336](index=336&type=chunk) [Other Information](index=88&type=section&id=Item%205.%20Other%20Information) This section discloses several significant corporate actions that occurred after the quarter ended. On **August 7, 2025**, the company reincorporated from Delaware to Nevada. On **August 8, 2025**, it entered into an 'At the Market' (ATM) sales agreement to offer and sell up to **$500 million** of its Class A common stock. Additionally, on **August 7, 2025**, the Compensation Committee granted performance-based restricted stock units (PSUs) to its named executive officers - On **August 7, 2025**, the company changed its state of incorporation from Delaware to Nevada[341](index=341&type=chunk) - On **August 8, 2025**, the company entered into a Controlled Equity Offering (ATM) Sales Agreement, allowing it to sell up to **$500.0 million** of Class A Common Stock from time to time[345](index=345&type=chunk) - On **August 7, 2025**, the Compensation Committee granted **2,569,600 Performance-Based Restricted Stock Units (PSUs)** to executive officers, vesting based on revenue growth and total shareholder return performance goals over three overlapping periods[178](index=178&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk)