Tempus AI, Inc. (TEM) , a leader in precision medicine and AI-enabled diagnostics, announced preliminary financial results for the fourth quarter and fiscal 2024. The company also provided additional details at the 43rd Annual J.P. Morgan Healthcare Conference, including forward-looking plans for 2025, emphasizing growth across genomics, data services and applications. The company's shares fell 13.8% on Jan. 13 as the top line missed market expectations.Tempus plans to report its complete fourth-quarter and ...

Collaboration Between Tempus and Genialis - Tempus AI Inc (TEM) announced a multi-year collaboration with Genialis to leverage Tempus' multimodal dataset for developing RNA-based algorithms across cancer types [1] - The partnership combines Tempus' expertise in clinical and molecular data with Genialis' AI-driven analytics to improve diagnostics and personalized treatments in precision medicine [2] - The collaboration enhances Tempus' offerings in precision medicine through AI-driven RNA biomarker development, potentially attracting more partnerships and increasing revenue potential [3] Impact on TEM Stock and Financials - Following the announcement, TEM shares declined 3.5% to close at $37.49, with a 6.9% loss over the past year compared to the industry's 10.5% decline [2] - TEM currently has a market capitalization of $6.12 billion, with Zacks Consensus Estimate projecting fiscal 2024 revenues of $698.5 million, indicating 117.8% growth from fiscal 2023 [4] Genialis' AI-Powered Model and Clinical Algorithms - Genialis developed an AI-powered model using data from around 1 million RNA-sequencing samples to generate precise biomarker algorithms for improving drug development [5][6] - The collaboration allows Genialis to use Tempus' de-identified patient data to validate biomarkers, speeding up the development of clinical algorithms [7] - Tempus' multimodal dataset played a key role in developing Genialis krasID, the first commercially available algorithm for identifying cancer patients who benefit from KRAS inhibition [8] Industry Prospects for AI in Healthcare - The global AI in healthcare market was estimated at $19.27 billion in 2023 and is expected to grow at a CAGR of 38.5% from 2024 to 2030 [9] - The adoption of digital technologies in healthcare is driven by the need to reduce costs and enhance patient-care services, boosting the growth of AI in the healthcare market [10] TEM's Zacks Rank and Peer Comparison - TEM carries a Zacks Rank 2 (Buy) at present [11] - Masimo (MASI) has an estimated growth rate of 11.8% for 2025, with shares rising 31.7% against the industry's 1% decline in the past six months [11][12] - Accuray (ARAY) has an estimated growth rate of 1200% for 2025, with shares gaining 8.8% against the industry's 1% decline in the past six months [12][13] - Abbott Laboratories (ABT) has an estimated earnings growth rate of 10% for 2025, with shares rising 8.5% in the past six months compared to the industry's 7.2% growth [13]

Tempus AI (TEM) , an innovator in artificial intelligence-based healthcare solutions, has been attracting investors' interest since its successful IPO in June 2024. The company’s stock has demonstrated impressive growth over the past six months, fueled by investor enthusiasm for AI-driven advancements and the company’s interesting financial performance.In the past six months, the stock has rallied 22.8%, outperforming the 16.5% rise of the Medical Info Systems industry and the benchmark’s 6.8% increase. In ...

Tempus AI, Inc.’s (TEM) investors have been encountering short-term losses from the stock of late. Shares of the Chicago, IL-based healthcare technology company focused on adopting artificial intelligence (AI) to advance precision medicine and patient care have plunged 28.9% in the past three months, underperforming the industry’s 0.6% gain. In the same time frame, the stock underperformed the sector and S&P 500’s 12.4% loss and 5.1% growth, respectively.Two major developments from TEM this month include th ...

Tempus AI TodayTEMTempus AI$33.03 -1.26 (-3.67%) 52-Week Range$22.89▼$79.49Price Target$56.00Add to WatchlistIn mid-August, around two months after Tempus AI’s NASDAQ: TEM initial public offering (IPO), the stock was up a marvelous 93%. However, shares have experienced wild volatility and are now 8% below their opening price of $37 as of the Dec. 18 close. Overall, Wall Street analysts seem to believe shares have fallen much too far. The average price target implies shares could rise 74% from their Dec. 18 ...

It is often difficult for investors to gauge success for recent IPOs, as there are many factors to take into consideration. In the event of Tempus AI (NASDAQ: TEM ), there are many long-term drivers to love aboutAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than f ...

Acquisition Details - Tempus AI announced an agreement to acquire Ambry Genetics for $600 million, with $375 million in cash and $225 million in equity [1][2] - The deal is expected to close in Q1 2025 and will be financed through $300 million in short and long-term debt [2][6] - Post-acquisition, Ambry will operate as a wholly owned subsidiary of Tempus, retaining its employees and full suite of testing services [6] Strategic Benefits - The acquisition aligns with Tempus AI's vision of integrating diagnostic and treatment solutions, enhancing its capabilities in hereditary cancer testing and expanding into new disease categories [7][8] - Ambry's expertise in hereditary cancer screening, rare diseases, pediatrics, cardiology, and reproductive health will broaden Tempus' reach across multiple specialties [4][8] - The integration of Ambry's services will streamline workflows by reducing dependency on multiple laboratories, appealing to healthcare providers seeking comprehensive solutions [8] Financial and Market Impact - Tempus AI's shares surged 18.4% following the acquisition announcement and have risen 45.6% year-to-date, outperforming the industry's decline of 13.2% [1][3] - Ambry Genetics is projected to generate $300 million in revenues in 2024, with annual growth exceeding 25%, positioning Tempus to capture a larger share of the genetic testing market [9] - The global hereditary cancer testing market, valued at $3.5 billion in 2021, is projected to grow at a CAGR of 11.6% until 2031, reaching $10.1 billion, indicating significant opportunities for Tempus [10][11] Recent Developments - Tempus AI reported strong top-line growth in its Data and Services segment, with significant expansion in adjusted gross margin [12] - The company announced a multi-year collaboration with BioNTech to leverage its TCR dataset for BioNTech's oncology pipeline and extended its strategic agreement with Merck EMD [13] Industry Prospects - The rise in the geriatric population, increased cancer incidence, and higher government healthcare expenditures are key drivers of growth in the hereditary cancer testing market [10]

Financial Data and Key Metrics - Revenue growth of 33% YoY, reaching $180.9 million in Q3 2024 [6] - Genomics unit growth accelerated to 23.9% YoY, with overall business growth around 20% [6] - Data and Services revenue grew 64.4% YoY, driven by data licensing business growth of 86.6% [7] - Adjusted EBITDA improved to negative $21.8 million, a $14.4 million YoY improvement [7] - Acquisition of Ambry Genetics for $600 million ($375 million in cash, $225 million in equity) at 1.9x revenue and 15x EBITDA [11] Business Line Performance - Genomics business delivered 69,000 tests in Q3, up from 66,500 in Q2, driven by core assays (xT, xR, xF) [28] - Data licensing business growth of 86.6% YoY, with total contract value (TCV) remaining above $900 million [24][26] - Ambry Genetics acquisition expected to accelerate EBITDA and cash flow breakeven, with Ambry growing at over 25% and generating significant EBITDA [9][10] Market Performance - Ambry Genetics is a leader in hereditary screening, with 95% of its volume in-network and strong payer relationships [45] - Tempus' Genomics business is primarily out-of-network, with recent progress in securing in-network contracts with Blue Shield of Illinois, Blue Shield of California, and Avalon [40] - Combined Tempus and Ambry business expected to generate $1 billion in revenue and grow at 23%-25% annually [44] Strategic Direction and Industry Competition - Ambry acquisition aligns with Tempus' strategy to offer comprehensive genomic profiling, from hereditary screening to therapy selection and minimal residual disease (MRD) monitoring [15][16] - Tempus aims to be a one-stop shop for oncologists, offering end-to-end solutions, similar to Amazon's approach in e-commerce [15] - The company is focused on leveraging AI in diagnostics and expanding its data business, with tools that make data usable for biotechs and pharmaceutical companies [25][50] Management Commentary on Operating Environment and Future Outlook - Tempus is on track to achieve adjusted EBITDA and cash flow breakeven, with Ambry acquisition accelerating this timeline [7][10] - Data business growth is expected to moderate from 87% YoY, with a focus on sustainable long-term growth in the 25% range [24][50] - Reimbursement for MRD testing remains a key gating factor, with progress expected in the coming years [20] Other Important Information - Tempus added 60 new sales reps in Q3, with productivity expected to improve over the next 6-9 months [30][31] - The company is exploring reimbursement pathways for AI-based diagnostic tools, which could unlock significant future revenue potential [59] Q&A Summary Question: Sustainability of Ambry's 25% growth rate and integration plans [13] - Ambry's growth is stable, with no signs of systemic slowdown, and the business is synergistic with Tempus' existing operations [17][18] - Integration will be gradual, with Ambry operating independently in the near term, but synergies expected in data business and payer relationships [45] Question: Data business growth and TCV trends [21][22] - Data business remains strong, with TCV above $900 million and Q4 historically being the largest quarter for data licensing [26] - Growth rates are expected to moderate, with a focus on sustainable long-term growth [24] Question: Sales force productivity and impact on growth [30][31] - Sales force productivity is improving, with reps expected to reach full efficiency in 6-9 months [31] - The impact on growth is minimal, with fluctuations in test volumes not significantly affecting financial health [33] Question: Ambry's revenue contribution and synergies [36][42] - Majority of Ambry's revenue is external, with minimal overlap with Tempus' existing business [37] - Synergies include leveraging Tempus' data business and Ambry's in-network payer relationships [45] Question: Reimbursement trends and ASP improvements [39][40] - Progress with commercial payers led to incremental ASP improvements, with ADLT status expected to drive further gains in 2025 [40] Question: Data purchasing environment and new customer trends [53] - Data business continues to see strong interest, with large wins like BioNTech, but overall market tailwinds have subsided [54] - Tempus expects a potential rebound in data purchasing as capital becomes more freely available in 2025 or 2026 [55] Question: AI applications and monetization pathways [56] - Collaboration with Northwestern Medicine on ECG-AF algorithm highlights potential for AI applications in healthcare [57] - Reimbursement for algorithmic diagnostics remains a key challenge, with significant revenue potential once payment pathways are established [59] Question: Ambry's impact on health system relationships [61] - Ambry's in-network payer relationships and genetic counselor focus complement Tempus' oncologist-driven business, strengthening overall platform [62][63] Question: Profitability and investment balance post-Ambry acquisition [65] - Tempus is now on an annualized EBITDA and cash flow positive basis, with a focus on sustaining growth rather than maximizing short-term profitability [66][67] Question: Reimbursement trends in psychiatric pharmacogenomics [69] - Tempus' neuropsych business is small, with minimal impact from reimbursement disruptions in the broader market [69] Question: Billing and value proposition of Tempus' CGP test [70] - Tempus follows established reimbursement pathways, with rates set by CMS and local MACs, and expects further ASP improvements with ADLT status [71][72]

TEMPUS 1 Tempus AI, Inc. Investor Presentation NOVEMBER 2024 Disclaimer 2 This presentation contains forward-looking statements that reflect Tempus AI, Inc.'s (the "Company" or "Tempus") current expectations and projections with respect to, among other things, its and Ambry Genetics' (Ambry) financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements include all statements that are not historical facts. Such forward-looking statements are subjec ...

Earnings Performance - Adjusted loss per share of 25 cents, beating the Zacks Consensus Estimate of 27 cents by 7.4% [1] - GAAP loss per share narrowed to 46 cents from $1.03 in the prior-year quarter [1] Revenue Growth - Total revenues of $180.9 million, beating the Zacks Consensus Estimate by 1.8% and growing 32.9% year-over-year [2] Segmental Performance Geonomics - Sales of $116.4 million, up 20.3% year-over-year, driven by unit growth acceleration of 23.9% annually [3] - Adjusted gross profit of $57.4 million, up 14.2% year-over-year, with adjusted gross margin contracting 260 bps to 49.3% [3] Data and Services - Sales of $64.5 million, up 64.4% year-over-year, driven by Insights (data licensing) growth of 86.6% annually [3] - Adjusted gross profit of $50.5 million, up 112.6% year-over-year, with adjusted gross margin expanding 1780 bps to 78.3% [3] Margins and Expenses - Adjusted gross profit of $107.9 million, up 45.8% year-over-year, with adjusted gross margin expanding 520 bps to 59.6% [4] - Total adjusted operating expenses of $139.3 million, up 17.2% year-over-year [4] - Total loss from operations of $53.6 million, expanding 19.7% year-over-year [4] Financial Position - Cash and cash equivalents and marketable securities of $467.2 million at the end of Q3 2024, down from $490.9 million at the end of Q2 2024 [5] - Cumulative net cash used in operating activities of $149.8 million, down from $174.1 million a year ago [5] 2024 Guidance - Full-year 2024 revenue guidance of approximately $700 million, representing a 32% year-over-year growth, slightly above the Zacks Consensus Estimate of $696.7 million [6] Strategic Developments - Multi-year collaboration with BioNTech to leverage Tempus' TCR dataset for BioNTech's next-generation oncology pipeline [9] - Three-year extension of the strategic agreement with Merck EMD [9] - Agreement to acquire Ambry Genetics for $375 million in cash and $225 million in shares, with $100 million subject to a lock-up agreement [10] Stock Performance - Shares lost 6.1% during after-market trading following Q3 results but gained 23% in the past six months, outperforming the industry's 8.1% rise and the S&P 500's 10.1% increase [8] Industry Comparison - AngioDynamics (ANGO) shares lost 19.2% year-to-date, underperforming the industry's 6.1% growth [12] - Quest Diagnostics (DGX) shares gained 42% year-to-date, outperforming the industry's 14.9% growth [12] - RadNet (RDNT) shares surged 93.7% year-to-date, significantly outperforming the industry's 14.8% growth [13]