Financial Performance - Total revenue for the three months ended September 30, 2024 was $180.9 million, compared to $136.1 million in the same period in 2023, representing a 32.9% increase[165] - Net losses for the three months ended September 30, 2024 were $75.8 million, compared to $53.4 million in the same period in 2023[165] - Adjusted EBITDA for the three months ended September 30, 2024 was $(21.8) million, compared to $(36.2) million in the same period in 2023[165] - Total net revenue increased from $136.1 million to $180.9 million for the three months ended September 30, 2024 compared to the same period in 2023, a 33% increase[202] - Adjusted EBITDA improved to $(96.9) million for the nine months ended September 30, 2024, compared to $(119.1) million in the same period in 2023[234] - The company had an accumulated deficit of $2.1 billion as of September 30, 2024, with cash, cash equivalents, and restricted cash totaling $388.9 million[235][237] - Net cash used in operating activities for the nine months ended September 30, 2024 was $149.8 million, driven by a net loss of $692.8 million[247][248] - Cash used in investing activities for the nine months ended September 30, 2024 was $122.4 million, including a $95.2 million investment in a joint venture[250] - Cash provided by financing activities for the nine months ended September 30, 2024 was $494.5 million, primarily from IPO proceeds and Series G-5 Preferred Stock issuance[252] Revenue Growth and Breakdown - Genomics revenue increased from $96.8 million to $116.4 million for the three months ended September 30, 2024 compared to the same period in 2023, a 20% increase[202] - Data and services revenue increased from $39.2 million to $64.5 million for the three months ended September 30, 2024 compared to the same period in 2023, a 64% increase[202] - Genomics revenue increased by $60.5 million (22%) for the nine months ended September 30, 2024, primarily due to a rise in oncology NGS tests from 159,400 to 198,200[217] - Data and services revenue increased by $48.1 million (42%) for the nine months ended September 30, 2024, driven by $43.4 million from Insights products and new customer adoption[218] - Total net revenue increased by $108.6 million (28%) for the nine months ended September 30, 2024, with Genomics contributing $60.5 million and Data and services contributing $48.1 million[216] Expenses and Costs - Cost of revenues increased by $54.2 million (30%) for the nine months ended September 30, 2024, primarily due to $20.5 million in stock-based compensation and $16.4 million in material and service costs[220] - Technology research and development expenses increased by $65.2 million (92%) for the nine months ended September 30, 2024, driven by $54.4 million in stock-based compensation and $9.4 million in personnel-related costs[222] - Selling, general and administrative expenses increased by $30.0 million (42%) in Q3 2024, primarily due to $12.6 million in stock-based compensation and $7.9 million in personnel-related costs[210] - Research and development expenses increased by $53.4 million (81%) to $119.7 million for the nine months ended September 30, 2024, driven by $44.8 million in stock-based compensation, $2.2 million in validation fees, and $5.3 million in personnel costs[223] - Selling, general, and administrative expenses rose by $432.4 million (204%) to $644.1 million, primarily due to $389.6 million in stock-based compensation and increases in personnel, software, and cloud storage costs[224] - Stock-based compensation expense recognized during the nine months ended September 30, 2024 was $509.4 million[258] Investments and Financing - The company completed its IPO on June 17, 2024, issuing 11,100,000 shares of Class A common stock at $37.00 per share, with net proceeds of $382.0 million[168] - The company entered into a Securities Purchase Agreement to acquire Ambry Genetics Corporation for $375.0 million in cash and 4,843,136 shares of Class A common stock[166] - The company secured a $100 million senior secured revolving credit facility and $200.0 million in additional term loans to fund the Ambry Genetics acquisition[167] - Net proceeds from the IPO in June 2024 were $382.0 million, and the company raised $200.0 million in a private placement in April 2024[237] - Term Loan Facility increased to $260 million after two amendments, with interest rates adjusted by 25 basis points and 7.25% for Term SOFR borrowings[241] - Convertible Promissory Note with Google reduced to $250 million, with principal reductions based on Google Cloud Platform usage[243][244] Partnerships and Commitments - AstraZeneca committed to spend a minimum of $220 million on the company's products and services through December 31, 2028, with potential to increase to $320 million[174] - GlaxoSmithKline committed to spend a minimum of $180 million on the company's products and services through December 31, 2027, with potential for an additional $120 million[176] - Recursion Pharmaceuticals agreed to pay up to $160 million in license fees over five years for access to the company's proprietary database and services[177] Product and Service Offerings - The company's Genomics product line leverages next-generation sequencing and other molecular pathology testing to generate structured, de-identified data for commercialization[164] - The company's offerings have been used by more than 7,000 physicians and over 200 biotech companies, including 19 of the 20 largest public pharmaceutical companies based on 2023 revenue[182] - The number of oncology NGS tests increased from approximately 55,700 tests for the three months ended September 30, 2023 to approximately 69,000 tests for the three months ended September 30, 2024[203] - Data and services revenue increased by $23.3 million in Q3 2024, driven by higher demand for Insights products and growth from existing and new customers[204] Interest and Other Financial Metrics - Interest income increased by $3.3 million (223%) in Q3 2024, driven by higher cash on hand[211] - Interest expense increased by $1.4 million (11%) in Q3 2024, primarily due to compounding interest on the Amended Note[212] - Other (expense) income, net decreased by $13.8 million (-604%) in Q3 2024, driven by a $45.6 million increase in expense related to the change in fair value of warrant liability[213] - Interest income increased by $1.7 million (29%) to $7.5 million, driven by higher cash on hand as of September 30, 2024[225] - Interest expense rose by $7.0 million (21%) to $40.3 million, primarily due to compounding interest on debt and additional borrowings[225] - Other (expense) income, net, decreased by $25.7 million (-325%) to $(17.8) million, driven by a $50.4 million increase in warrant liability fair value expense[226] - Losses from equity method investments increased by $1.4 million (462%) to $1.7 million, due to losses from a joint venture entered into in July 2024[228] Reimbursement and Testing Metrics - As of December 31, 2023, the company had received payment on approximately 50% of its clinical oncology NGS tests across all payers performed from January 1, 2021 through December 31, 2022[184] - The company's average reimbursement for NGS tests in oncology was approximately $916 and $1,452 for the years ended December 31, 2022 and 2023, respectively[184] Risk Factors - Company is exposed to interest rate risk and foreign currency risk, with no material impact from a hypothetical 10% change in foreign currency exchange rates[262][264] - Inflation risk could impact future operating results, though no material impact has been observed to date[265] - Majority of revenue generated in the United States, with insignificant foreign currency-denominated revenue as of September 30, 2024[264] - Hypothetical 10% change in foreign currency exchange rates would not materially impact financial condition or results of operations as of September 30, 2024[264] - No hedging arrangements in place for foreign currency risk as of September 30, 2024[264] - Company exposed to inflation risk, including increases in raw material and overhead costs[265] - Inflation has not materially impacted financial position or results of operations to date[265] - High future inflation rates may adversely affect gross margin and operating expenses as a percentage of revenue[265] Future Outlook and Requirements - The company anticipates increased capital expenditure requirements due to higher demand for its tests and potential expansion of laboratory capacity[236] - Company required to generate consolidated revenues of $459.1 million and $594.1 million for the years ending December 31, 2024 and 2025, respectively[242]

Revenue Growth - Revenue increased 33.0% year-over-year to $180.9 million in Q3 2024[2] - Data and services revenue grew 64.4% year-over-year, reaching $64.5 million[4] - Genomics revenue was $116.4 million, an increase of 20.3% year-over-year, with unit growth of 23.9%[4] - Total net revenue for Q3 2024 was $180,929,000, representing a 33% increase from $136,057,000 in Q3 2023[20] - Genomics revenue increased to $116,422,000 in Q3 2024, up 20% from $96,815,000 in Q3 2023[20] - Data and services revenue rose to $64,507,000 in Q3 2024, a 64% increase compared to $39,242,000 in Q3 2023[20] - Genomics revenue for the nine months ended September 30, 2024, increased to $331,315 thousand, up from $270,797 thousand in the same period of 2023, representing a growth of approximately 22.3%[30] - Data and services revenue for the nine months ended September 30, 2024, reached $161,403 thousand, compared to $113,301 thousand in the same period of 2023, reflecting a growth of approximately 42.5%[31] Financial Performance - Net loss for Q3 2024 was $(75.8) million, including $22.2 million of stock compensation expense[4] - Adjusted EBITDA improved to $(21.8) million, a $14.4 million year-over-year improvement[2] - The company reported a comprehensive loss of $65,538,000 for Q3 2024, compared to a comprehensive loss of $53,480,000 in Q3 2023[20] - Net loss for the nine months ended September 30, 2024, was $692,795 thousand, compared to a net loss of $163,635 thousand for the same period in 2023[25] - The net loss for the three months ended September 30, 2024, was $(75,840) million, compared to $(53,426) million in the same period of 2023[35] - Non-GAAP net loss per share for the nine months ended September 30, 2024, was $(1.53), compared to $(1.53) in the same period of 2023[35] Expenses - Total operating expenses for Q3 2024 were $234,545,000, up 30% from $180,846,000 in Q3 2023[20] - Operating expenses for the three months ended September 30, 2024, totaled $159,455 million, a 34% increase from $118,816 million in the same period of 2023[34] - Non-GAAP operating expenses for the nine months ended September 30, 2024, were $404,996 million, compared to $348,415 million for the same period in 2023, indicating a 16% increase[34] - Technology research and development expenses for the three months ended September 30, 2024, were $30,680 million, up from $24,156 million in the same period of 2023, reflecting a 27% increase[34] - Selling, general and administrative expenses for the three months ended September 30, 2024, were $101,427 million, compared to $71,426 million in the same period of 2023, a 42% increase[34] Cash and Assets - Cash and cash equivalents increased to $388,006,000 as of September 30, 2024, from $165,767,000 at December 31, 2023[21] - Total current assets reached $679,412,000 as of September 30, 2024, up from $350,331,000 at December 31, 2023[21] - Total cash, cash equivalents, and restricted cash at the end of the period was $388,878 thousand, up from $133,528 thousand at the end of the same period in 2023[27] Liabilities and Equity - Total liabilities increased to $918,000,000 as of September 30, 2024, compared to $840,672,000 at December 31, 2023[22] - Stockholders' equity improved to $53,728,000 as of September 30, 2024, from a deficit of $1,382,163,000 at December 31, 2023[24] Future Outlook - Full year 2024 revenue is expected to be approximately $700 million, representing ~32% annual growth[10] - Ambry Genetics is expected to generate over $300 million in revenue and over $40 million in EBITDA in 2024[7] - Tempus announced an agreement to acquire Ambry Genetics for $375 million in cash and $225 million in shares[7] - Tempus initiated a collaboration with BioNTech to support its next-generation oncology pipeline[6]

Revenue and Financial Performance - Total revenue for the three months ended June 30, 2024 was $166.0 million, compared to $132.4 million in the same period in 2023, representing a 25.4% increase[141] - Total net revenue increased by 25% to $165.9 million in Q2 2024 compared to $132.4 million in Q2 2023[181] - Total net revenue increased by $63.7 million (26%) for the six months ended June 30, 2024, driven by growth in Genomics and Data and Services[195] - Genomics revenue increased by 22% to $112.3 million in Q2 2024, driven by a rise in oncology NGS tests from 55,300 in Q2 2023 to 66,500 in Q2 2024[181][182] - Genomics revenue increased by $40.9 million (24%) for the six months ended June 30, 2024, primarily due to an increase in oncology NGS tests from 103,700 to 129,200[196] - Data and services revenue grew by 32% to $53.6 million in Q2 2024, primarily due to increased demand for Insights products and adoption by new customers[181][184] - Data and services revenue increased by $22.8 million (31%) for the six months ended June 30, 2024, driven by $20.1 million from increased demand for Insights products[197] Net Losses and Adjusted EBITDA - Net losses for the three months ended June 30, 2024 were $552.2 million, compared to $55.8 million in the same period in 2023[141] - Adjusted EBITDA for the three months ended June 30, 2024 was $(31.2) million, compared to $(37.0) million in the same period in 2023[141] - Adjusted EBITDA for the six months ended June 30, 2024, was $(75.112) million, compared to $(82.892) million in the same period in 2023, reflecting improved operating performance[216] - The company had an accumulated deficit of $2.1 billion as of June 30, 2024, and expects to incur additional operating losses in the near future as it continues to invest in new offerings and market expansion[218][219] Research and Development (R&D) and Technology Investment - Research and development investment for the three months ended June 30, 2024 was $68.1 million, compared to $22.2 million in the same period in 2023[159] - Technology investment for the three months ended June 30, 2024 was $77.9 million, compared to $23.4 million in the same period in 2023[161] - Research and development expenses increased significantly, with technology R&D reaching $77.9 million in Q2 2024, up from $23.4 million in Q2 2023[180] - Research and development expenses increased by $45.9 million (207%) for the three months ended June 30, 2024, primarily due to $42.2 million in stock-based compensation related to RSUs[187] - Technology research and development expenses increased by $54.5 million (233%) for the three months ended June 30, 2024, driven by $50.4 million in stock-based compensation related to RSUs[188] - The company plans to continue investing in new assay development, technology platforms, and expansion into new disease areas, expecting R&D expenses to increase in absolute dollars[170][171] Selling, General, and Administrative (SG&A) Expenses - Selling, general, and administrative expenses surged to $463.1 million in Q2 2024, largely due to IPO-related costs and increased headcount[174][180] - Selling, general and administrative expenses increased by $391.9 million (550%) for the three months ended June 30, 2024, primarily due to $377.1 million in stock-based compensation related to RSUs[190] - The company expects selling, general, and administrative expenses to decrease modestly as a percentage of revenue in the long term, despite increasing in absolute dollars[174] Strategic Collaborations and Market Presence - The company has strategic collaborations with AstraZeneca, GlaxoSmithKline, and Recursion Pharmaceuticals, with minimum commitments of $220 million, $180 million, and up to $160 million respectively[151][154][155] - The company's offerings have been used by more than 7,000 physicians and over 200 biotech companies, including 19 of the 20 largest public pharmaceutical companies based on 2023 revenue[160] - The company's Platform connects multiple stakeholders within the healthcare ecosystem, enabling data-driven decisions and therapeutic development[139] - The company's Genomics product line provides next-generation sequencing, PCR profiling, and molecular genotyping, with data commercialized to pharmaceutical and biotechnology partners[140] Cost of Revenues - Cost of revenues for Genomics increased by 45% to $68.3 million in Q2 2024, driven by $11.3 million in stock-based compensation and higher material and personnel costs[185][186] - Cost of revenues for Data and services rose by 60% to $22.1 million in Q2 2024, primarily due to increased stock-based compensation and cloud expenses[185] - Cost of revenues increased by $41.1 million (35%) for the six months ended June 30, 2024, primarily due to $18.5 million in stock-based compensation related to RSUs[199] Interest and Other Financial Metrics - Interest income decreased by $239,000 (-12%) for the three months ended June 30, 2024, compared to the same period in 2023[191] - Interest expense increased by $1.6 million (14%) for the three months ended June 30, 2024, primarily driven by compounding interest on the Amended Note[192] - Other (expense) income, net increased by $6.3 million (820%) for the three months ended June 30, 2024, primarily due to $3.7 million in unrealized losses on marketable equity securities[193] - Interest income decreased by 37% to $2.749 million for the six months ended June 30, 2024, compared to $4.381 million in the same period in 2023, primarily due to U.S. Federal Reserve interest rate decreases[206] - Interest expense increased by 27% to $26.533 million for the six months ended June 30, 2024, compared to $20.903 million in the same period in 2023, driven by compounding interest on the Amended Note and additional debt under the Term Loan Facility[207] - Other (expense) income, net decreased by 212% to $(6.299) million for the six months ended June 30, 2024, compared to $5.622 million in the same period in 2023, primarily due to fair value changes in warrant assets and liabilities, and the Series G-4 Special Payment[208] - Provision for income taxes increased by 1078% to $(106) thousand for the six months ended June 30, 2024, compared to $(9) thousand in the same period in 2023, though the increase was not material[209] - Losses from equity method investments decreased by 100% to $0 for the six months ended June 30, 2024, compared to $(301) thousand in the same period in 2023, due to the exhaustion of the investment in a joint venture[210] Cash Flow and Liquidity - Net cash used in operating activities for the six months ended June 30, 2024 was $198.5 million, driven by a net loss of $617.0 million and non-cash charges of $522.3 million[232] - Cash provided by financing activities for the six months ended June 30, 2024 was $502.6 million, primarily from IPO proceeds of $382.0 million and Series G-5 Preferred Stock issuance of $199.8 million[237] - Cash provided by investing activities for the six months ended June 30, 2024 was $9.0 million, resulting from $23.1 million in proceeds from marketable equity securities sales[235] - As of June 30, 2024, the company held $479.7 million in cash, cash equivalents, and restricted cash, primarily in cash deposits and money market funds[247] - The company believes its current cash and cash equivalents, marketable equity securities, and anticipated cash flows from operations will be sufficient to meet its cash requirements for more than twelve months[221] - The Term Loan Facility, with an aggregate principal amount of $260 million, requires the company to maintain a minimum liquidity of $25 million and generate consolidated revenues of $459.1 million and $594.1 million for the years ending December 31, 2024, and 2025, respectively[225][226] - The amended and restated Note has a principal amount of $250.0 million, with annual reductions based on Google Cloud Platform usage, and is due by March 22, 2026[229] Stock-Based Compensation and IPO - Stock-based compensation expense recognized during the six months ended June 30, 2024 was $488.3 million due to the IPO liquidity event[241] - The company completed its IPO on June 17, 2024, issuing 11,100,000 shares of Class A common stock at $37.00 per share, raising net proceeds of $382.0 million[144] Reimbursement and Clinical Oncology NGS Tests - As of December 31, 2023, the company received payment on approximately 50% of clinical oncology NGS tests performed from January 1, 2021, through December 31, 2022, with average reimbursement of $916 in 2022 and $1,452 in 2023[163] International Revenue and Inflation Risk - The company's international revenue is currently insignificant, but future foreign currency exchange rate fluctuations may impact operations as global presence expands[248] - The company is exposed to inflation risk, which could affect gross margins and operating expenses as a percentage of revenue in the future[249]

Tempus Reports Second Quarter 2024 Results CHICAGO, August 6, 2024 — 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 that ended June 30, 2024, and provided recent business highlights. • Revenue increased 25% year-over-year to $166.0 million in the second quarter of 2024 • Data licensing revenue growth accelerated to 40% year-over-year • Expanded into the minimal residual disease (M ...