Financial Performance - Total revenue for the three months ended September 30, 2025, was $334.2 million, a 84.5% increase from $180.9 million in the same period of 2024[218] - Net losses for the three months ended September 30, 2025, were $80.0 million, compared to $75.8 million in the same period of 2024[218] - Adjusted EBITDA for the three months ended September 30, 2025, was $1.5 million, a significant improvement from $(21.8) million in the same period of 2024[218] - The company generated total revenue of $904.6 million for the nine months ended September 30, 2025, compared to $492.7 million in the same period of 2024, representing an increase of 83.6%[218] - The company incurred net losses of $190.9 million for the nine months ended September 30, 2025, compared to $692.8 million in the same period of 2024, indicating a significant reduction in losses[218] - Total net revenue for the three months ended September 30, 2025, was $334,206,000, an increase of 85% compared to $180,929,000 in the same period of 2024[260] - Genomics revenue increased by 117% to $252,878,000 for the three months ended September 30, 2025, up from $116,422,000 in 2024, driven by a higher volume of tests performed[260][261] - Genomics revenue increased by 108% to $688.5 million for the nine months ended September 30, 2025, compared to $331.3 million in 2024[278] - Total net revenue for the nine months ended September 30, 2025, was $904.6 million, up 84% from $492.7 million in 2024[278] Acquisitions and Investments - The acquisition of Ambry Genetics Corporation was completed for $375.0 million in cash and 4,843,136 shares of Class A common stock, valued at $61.54 per share[221] - The acquisition of Paige.AI, Inc. was completed for a total consideration of $102.7 million, including $3.0 million in cash and 1,272,151 shares of Class A common stock, valued at $80.52 per share[227] - The company invested $45.0 million and $27.3 million in research and development during the three months ended September 30, 2025 and 2024, respectively, and $122.5 million and $119.7 million during the nine months ended September 30, 2025 and 2024, respectively[236] - The company plans to continue investing in new assay development and expansion into new disease areas, leading to an expected increase in research and development expenses[247] - The company anticipates that technology research and development expenses will increase in absolute dollars as it continues to invest in its technology platform and new product development[248] Expenses and Costs - Cost of revenues for the Genomics product line is expected to increase in absolute dollars as revenue continues to grow[245] - Selling, general and administrative expenses rose by 85% to $187,891,000 for the three months ended September 30, 2025, compared to $101,427,000 in 2024, largely due to personnel-related costs from the Ambry acquisition[270] - Research and development expenses increased by 64% to $44,960,000 for the three months ended September 30, 2025, compared to $27,348,000 in 2024, driven by higher personnel-related costs[269] - Cost of revenues increased by 65% to $124,264,000 for the three months ended September 30, 2025, compared to $75,090,000 in 2024, primarily due to increased material and service costs[265] - Cost of revenues increased by 47% to $344.4 million for the nine months ended September 30, 2025, compared to $233.7 million in 2024[283] - Selling, general and administrative expenses decreased by 19% to $523.2 million for the nine months ended September 30, 2025, compared to $644.1 million in 2024[288] Financing Activities - The company completed a private offering of $750.0 million in Convertible Senior Notes due 2030, with net proceeds of $725.7 million after expenses[219][220] - On July 3, 2025, the company completed the offering of $750 million aggregate principal amount of 0.75% Convertible Senior Notes due 2030, with net proceeds of $725.7 million[307] - The company entered into a Credit Agreement for a senior secured loan with an original principal amount of $175 million, which has been increased to $260 million through amendments[315] - Cash provided by financing activities for the nine months ended September 30, 2025 was $887.7 million, driven by net proceeds from the Notes of $726.5 million and net proceeds from the ATM of $195.5 million[335] - The company sold 2,381,895 shares under the ATM at a weighted average price of $83.97 per share, generating total proceeds of $195.5 million, net of commissions[328] Legal and Compliance - The company has received requests for documents related to compliance with the False Claims Act and has provided responsive documents[359] - The company is involved in various legal proceedings, including a federal securities class-action lawsuit, which it intends to defend vigorously[362] Market Presence and Future Outlook - The company has worked with over 200 biotech companies and 19 of the 20 largest public pharmaceutical companies based on 2024 revenue, indicating strong market presence[237] - The company anticipates continued growth in Genomics and Data and Services segments, supported by the integration of Ambry and increased demand for Insights products[264] - The company expects to incur additional operating losses in the near future as it invests in new offerings and expands its sales organization[302] Cash and Liquidity - As of September 30, 2025, the company had cash, cash equivalents, and restricted cash totaling $660.5 million[303] - The company has an accumulated deficit of $2.3 billion as of September 30, 2025[301] - The company anticipates that its current cash and cash equivalents will be sufficient to meet its cash requirements for more than twelve months from the date of the report[304] - The company may seek to raise additional capital for business expansion and strategic investments[304] - The company has a minimum liquidity requirement of at least $25 million and must maintain specified amounts of consolidated revenues, with a minimum of $1.0 billion for the trailing twelve months ending December 31, 2025[323] Interest and Debt - Interest expense increased by 12% to $(15,399,000) for the three months ended September 30, 2025, compared to $(13,761,000) in 2024, primarily due to compounding interest on loans[272] - Interest expense increased by 36% to $(54.98) million for the nine months ended September 30, 2025, from $(40.29) million in 2024[291] - The principal balance of the Second Amended Note was reset to $238.8 million, with an interest rate of 6.0% per annum, compounded annually[326] - The company incurred $0.8 million in deferred offering costs related to the Sales Agreement, which were reclassified as a reduction of paid-in-capital upon completion of the sale[328] Risk Factors - The conditional conversion feature of the Notes may adversely affect the company's financial condition and operating results if triggered[368] - The company may experience a material reduction in net working capital if a portion of the outstanding principal of the Notes is reclassified as a current liability[370] - The company is subject to counterparty risk with respect to the Capped Call, as option counterparties are financial institutions[373] - Global economic conditions could adversely affect the performance of option counterparties under the Capped Call, potentially increasing dilution[374]

Financial Performance - Revenue grew 84.7% year-over-year to $334.2 million in Q3 2025[5] - Gross profit reached $209.9 million in Q3 2025, an improvement of 98.4% year-over-year[5] - Adjusted EBITDA of $1.5 million in Q3 2025 compared to a loss of $21.8 million in Q3 2024, an improvement of $23.3 million year-over-year[5] - Total net revenue for Q3 2025 reached $334.2 million, a 84.5% increase from $180.9 million in Q3 2024[23] - Genomics revenue was $252.9 million for Q3 2025, compared to $116.4 million in Q3 2024, representing a 116.7% year-over-year growth[23] - The company reported a net loss of $80.0 million for Q3 2025, slightly higher than the net loss of $75.8 million in Q3 2024[23] - The company reported a comprehensive loss of $82.9 million for Q3 2025, compared to a comprehensive loss of $65.5 million in Q3 2024[23] - Non-GAAP net loss per share for Q3 2025 was $0.11, an improvement from $0.24 in Q3 2024[39] - Total net loss for the nine months ended September 30, 2025, was $190,862, a decrease from $692,795 in the same period of 2024[39] Revenue Segmentation - Oncology testing contributed $139.5 million, up 31.7% year-over-year, with approximately 27% volume growth[5] - Hereditary testing contributed $102.6 million, an increase of 32.8% year-over-year, with approximately 37% volume growth[5] - Genomics revenue for the nine months ended September 30, 2025, reached $688.5 million, a 107.5% increase from $331.3 million in 2024[35] - Data and services revenue for the nine months ended September 30, 2025, was $216.1 million, up 33.9% from $161.4 million in 2024[36] - Total net revenue for the nine months ended September 30, 2025, was $904.6 million, compared to $492.7 million in 2024, reflecting an increase of 83.6%[37] Expenses and Liabilities - Total operating expenses for Q3 2025 were $395.2 million, up from $234.5 million in Q3 2024, marking a 68.4% increase[23] - Operating expenses for the nine months ended September 30, 2025, totaled $751.6 million, down from $899.4 million in 2024, indicating a reduction of 16.4%[38] - Total liabilities increased to $1.77 billion as of September 30, 2025, compared to $869.8 million at December 31, 2024[25] - The company incurred $12.0 million in loss on debt extinguishment during the nine months ended September 30, 2025[23] Cash and Assets - The company ended the quarter with $764.3 million of cash and marketable securities[5] - Cash and cash equivalents increased to $655.9 million as of September 30, 2025, compared to $341.0 million at December 31, 2024[25] - Total assets grew to $2.28 billion as of September 30, 2025, up from $926.1 million at December 31, 2024[25] - Cash, cash equivalents, and restricted cash at the end of the period were $660.5 million, up from $388.9 million at the beginning of the period, marking an increase of 70%[32] - Net cash provided by financing activities for the nine months ended September 30, 2025, was $887.7 million, compared to $494.5 million in 2024, an increase of 79.6%[32] Investments and Acquisitions - Acquired Paige, an AI company specializing in digital pathology, to expand dataset and technical team[5] - The company invested $375.0 million in business combinations during the nine months ended September 30, 2025[32] Regulatory and Program Participation - Selected by ARPA-H to provide testing and CRO services for the ADAPT program[5] - Obtained 510(k) clearance from the U.S. FDA for xR IVD, supporting life sciences' drug development programs[5] Stock and Shareholder Information - Stock-based compensation expenses for the nine months ended September 30, 2025, were $79.4 million, down from $509.4 million in the same period of 2024[29] - Stock-based compensation expense increased to $33,979 in Q3 2025 from $21,038 in Q3 2024, reflecting a rise of 61.5%[41] - Weighted average common shares outstanding increased to 174,945 in Q3 2025 from 165,612 in Q3 2024[39] Other Financial Metrics - Non-GAAP gross margin for the nine months ended September 30, 2025, improved to 62.7%, compared to 56.8% in 2024[37] - The company incurred $37.3 million in cash paid for interest during the nine months ended September 30, 2025, compared to $20.9 million in 2024[32] - Fair value changes resulted in a gain of $1,255 in Q3 2025, compared to a gain of $15,605 in Q3 2024[41] - Loss from operations for Q3 2025 was $60,996, compared to $53,616 in Q3 2024, indicating a decline of 13.5% year-over-year[43] - Acquisition-related expenses for Q3 2025 amounted to $552, while there were no such expenses in Q3 2024[40] - Amortization of intangibles due to acquisition was $16,764 in Q3 2025, with no corresponding expense in Q3 2024[43]

Core Insights - Tempus AI is positioned as a significant player in the health AI sector, which is expected to yield transformative innovations in medicine [2][4] - The company has garnered attention from notable investors, indicating confidence in its potential despite being a relatively small firm valued at $15 billion [3] - Recent stock performance shows a decline of nearly 17% from its all-time high, presenting a potential buying opportunity for investors [5] Company Overview - Tempus AI is recognized for its AI-driven precision medicine solutions, which are gaining traction in the healthcare industry [5] - The company is currently trading at a trailing price-to-earnings (P/E) multiple of 40.1, which is considered reasonable given the market opportunity [6] Investment Considerations - The investment landscape for health AI is complex, but there is a shift towards applied AI technologies, which may offer more substantial returns compared to traditional generative AI models [2][4] - The presence of high-profile investors like Cathie Wood and Nancy Pelosi suggests a strong belief in Tempus AI's growth potential [3]

Group 1 - Tempus AI (NASDAQ:TEM) is not typically recognized as a leading AI stock in the machine-learning sector despite its potential for disruption [1]

Industry Overview - The integration of genomics into cancer care has shifted treatment from uniform therapies to precision medicine, tailoring clinical decisions to individual tumor genetics and molecular profiles [1] - The genomics in cancer care market was valued at $21.07 billion in 2024, with an expected CAGR of 16.2% from 2025 to 2030, driven by technology innovation and clinical validation [1] Company Profiles Tempus AI - Tempus AI reported $241.8 million in Genomics revenues for the quarter ended June 2025, marking a nearly 115% year-over-year increase, supported by a 26% volume growth in oncology tests [5] - The company launched a new liquid biopsy assay, xM for Treatment Response Monitoring, designed to track tumor fraction changes in patients undergoing immune-checkpoint inhibitor therapies [6] - Tempus plans to introduce its first whole-genome sequencing test, Xh, next year, and is developing a companion diagnostic with Verastem Oncology [7] - Tempus AI's Genomics revenues surged 115% year over year, with significant contributions from testing growth and acquisitions [9] - The Data and Services segment saw a 35.7% year-over-year increase in sales, driven by a 40.7% rise in Insights, the data licensing business [10] - A notable development includes a $200 million data and modeling license agreement with AstraZeneca and Pathos, enhancing Tempus' contract value to over $1 billion [11] Exact Sciences - Exact Sciences is strengthening its position in cancer diagnostics, with international adoption of its Oncotype DX and validation of its Oncodetect test for predicting recurrence in colorectal cancer [12] - The company launched Cologuard Plus, an enhanced colorectal cancer screening test expected to reduce false-positive results by over 40% compared to the original [13] - Exact Sciences introduced Cancerguard, a multi-cancer early detection blood test, which is the first commercially available test analyzing multiple biomarker classes [14] - Cologuard remains a cornerstone of Exact Sciences' portfolio, with the company delivering its 20 millionth result, doubling its total from three years ago [15] Valuation and Performance - Tempus AI is trading at a forward 12-month price-to-sales ratio of 10.52, while Exact Sciences has a forward sales multiple of 3.46, indicating that Tempus is trading at a premium [16] - The Zacks Consensus Estimate for Tempus' 2025 sales implies an 81.21% year-over-year growth, while Exact Sciences' sales are expected to rise by 14.4% [17][20] - Tempus AI has seen a year-to-date share price increase of 158.8%, while Exact Sciences has gained 12.6% [4] Investment Considerations - Tempus AI's strong momentum in genomic testing and data partnerships, alongside Exact Sciences' advancements in molecular diagnostics, positions both companies as key players in the genomics landscape [20] - Exact Sciences, currently rated as a Strong Buy, is viewed as more attractively valued compared to Tempus AI, which holds a Hold rating [21][22]

Core Insights - Tempus AI, Inc. will participate in the Stifel 2025 Healthcare Conference on November 13, 2025, with CFO Jim Rogers speaking in a fireside chat [1] - The company will report its third quarter 2025 financial results on November 4, 2025, with a conference call featuring CEO Eric Lefkofsky and CFO Jim Rogers [4] - Tempus has announced a multi-year collaboration with Whitehawk Therapeutics to enhance biomarker-driven oncology research [5] - Six abstracts from Tempus have been accepted for presentation at the European Society for Medical Oncology Congress 2025, highlighting the role of real-world data and AI in personalized medicine [6] Company Overview - Tempus is a technology company focused on advancing precision medicine through artificial intelligence, utilizing one of the largest libraries of multimodal data to provide AI-enabled solutions for personalized patient care [2]

Core Insights - Tempus AI, Inc. is recognized as a significant player in the AI sector on Wall Street, with a Buy rating and a price target of $110.00 set by Canaccord Genuity analyst Kyle Mikson, driven by the potential for AI deployment in clinical practice to enhance long-term revenue growth [1][3]. Group 1: Company Overview - Tempus AI, Inc. operates in the healthcare technology sector, providing AI-enabled precision medicine solutions, including oncology testing for genomic profiling and data services [3]. - The company has a strong acquisition strategy, exemplified by the Ambry deal, which is expected to enhance testing capabilities and AI functionalities, thereby accelerating growth [2][3]. Group 2: Financial Projections - The firm's DCF model for Tempus AI includes key assumptions such as a 10-year revenue compound annual growth rate (CAGR) of 22.8% and a peak operating margin of 45.6%, with a discount rate of 15.0% [3].

Core Insights - Tempus AI Inc. has achieved significant regulatory milestones in AI-driven diagnostics, including FDA 510(k) clearances for multiple devices in 2025 [1][8] Regulatory Approvals - In September 2025, Tempus received FDA 510(k) clearance for its RNA-based Tempus xR IVD device, which aids drug development through advanced RNA sequencing [1][8] - The Tempus xR IVD assay utilizes next-generation sequencing technology to detect gene rearrangements in RNA from tumor tissue specimens [2] - The updated Tempus Pixel, an AI-powered cardiac imaging platform, also received FDA clearance in September, enhancing its capabilities for cardiac MR image analysis with new T1 and T2 inline maps [3][8] - In July 2025, Tempus obtained FDA 510(k) approval for Tempus ECG-Low EF, an AI software that identifies patients with low left ventricular ejection fraction (LVEF ≤ 40%) [4][8] Competitive Landscape - GE HealthCare received FDA 510(k) clearance for its Revolution Vibe CT system, which improves cardiac diagnoses and reduces exam time [5] - Guardant Health gained FDA approval for its Guardant360 CDx as a companion diagnostic for advanced breast cancer patients [6] Stock Performance - Tempus AI shares have increased by 105.8% over the past year, outperforming the industry growth of 28.4% and the S&P 500's 18.8% [6][8] Valuation Metrics - Tempus AI currently trades at a forward Price-to-Sales (P/S) ratio of 10.26X, significantly higher than the industry average of 5.87X [9] Earnings Estimates - The loss per share estimate for Tempus AI for 2025 has remained unchanged over the past 30 days [10]

Upgrades - BofA upgraded Eversource (ES) to Buy from Neutral with a price target of $85, up from $73, citing an "improving regulatory tone" and a projected 6% EPS growth through 2029 [2] - Leerink upgraded Exelixis (EXEL) to Outperform from Market Perform with a price target of $48, up from $38, following the Phase 3 STELLAR-303 trial results, which established important levers for long-term investment despite a 12% stock decline [3] - Citi upgraded Nextracker (NXT) to Buy from Neutral with a price target of $114, up from $66, highlighting its dominant position in tracker sales and potential revenue contributions from acquired businesses by FY30 [4] - Citi upgraded Sunrun (RUN) to Buy from Neutral with a price target of $26, up from $11, noting benefits from rising electricity rates and increased leverage over suppliers due to market shifts [5] - Raymond James upgraded Capri Holdings (CPRI) to Outperform from Market Perform with a price target of $25, indicating a favorable turnaround position supported by improving demand and conservative guidance [6] Downgrades - JPMorgan downgraded Goldman Sachs (GS) to Neutral from Overweight with a price target of $750, up from $625, citing high current valuations compared to European investment banks [7] - BNP Paribas Exane downgraded Verizon (VZ) to Neutral from Outperform with a price target of $44, raising concerns about strategic direction following a recent CEO change [7] - BNP Paribas Exane downgraded NuScale Power (SMR) to Underperform from Neutral with a price target of $25, down from $41, due to concerns over cumulative shipments and financial commitments [7] - Citi downgraded NuScale to Sell from Neutral with a price target of $37.50, down from $46, highlighting potential sales by Fluor and stretched valuations [7] - TD Cowen downgraded Tempus AI (TEM) to Hold from Buy with a price target of $88, up from $72, viewing the stock as fairly valued after a significant rally [7] - Wells Fargo downgraded Cleveland-Cliffs (CLF) to Underweight from Equal Weight with an unchanged price target of $11, describing the recent stock rally as "excess exuberance" [7]

Group 1 - Tempus AI experienced a 5% increase in share price following an optimistic analyst update, outperforming the S&P 500 which rose by 1.1% [1] - Analyst Kyle Mikson from Cannacord Genuity maintained a buy rating for Tempus AI with a price target of $110 per share, despite not changing his recommendation [2] - Mikson emphasized that Tempus AI is providing advanced medical tech services that could significantly impact the pharmaceutical market, and the use of AI in clinical practices could enhance revenue growth [3] Group 2 - The company is pursuing growth through acquisitions, having recently acquired Paige, an AI company focused on pathology, which aligns with its strategy to enhance its capabilities [4] - Tempus AI is well-positioned to leverage AI advancements in drug discovery, with potential for creating multiple new revenue streams through its expansion into various medical segments [5] - An analyst reiterated a positive outlook on Tempus AI's future, maintaining a buy recommendation [8]