Tempus Ai,Inc.(TEM) - 2025 Q4 - Annual Report

Data Integration and Platform Capabilities - The company has built the Tempus Platform, which includes over 700 unique data connections across more than 5,000 healthcare institution sites, enabling near real-time access to complex multimodal data[23]. - The platform's ability to contextualize test results and incorporate real-world evidence is expected to enhance decision-making for physicians regarding drug prescriptions and clinical trials[46]. - The platform is purpose-built to deploy AI across multiple disease areas, including oncology, neurology, and cardiology, aiming to transform healthcare through comprehensive data integration[35]. - The company has established new data pipelines to facilitate the free exchange of data between healthcare providers and diagnostic companies, addressing the issue of disconnected healthcare data[21]. - The company’s multimodal database is currently over 450 petabytes in size, with ongoing growth expected to drive innovations in patient treatment[62]. - The company has developed proprietary tools to facilitate data ingestion and has relationships with over 65% of all academic medical centers in the U.S.[56]. - The company aims to democratize the use of near-real-time molecular, clinical, and imaging data to improve therapeutic research and development[62]. Diagnostics and Testing Services - The Diagnostics product line provides Next Generation Sequencing (NGS) diagnostics and other testing services, with tests connected to clinical data, allowing for self-learning and improved accuracy[26]. - Intelligent Diagnostics are designed to provide personalized test results by incorporating a patient's longitudinal data and clinical context, improving the accuracy and relevance of laboratory tests[37]. - The Diagnostics product line offers a comprehensive suite of Intelligent Diagnostics, generating a steady stream of molecular data that fuels growth in the Data and applications product line[83]. - The company operates five laboratories providing NGS diagnostics, PCR profiling, and other tests, with a focus on cancer diagnostics, leveraging clinical data to enhance test accuracy[84]. - The Tempus xT test, launched in 2017, covers 648 genes and has received FDA approval in April 2023, demonstrating sensitivities greater than 98% for SNVs and 99.9% for MSI[88]. - The Tempus xR test, launched in 2023, provides full transcriptomic profiling and has shown that 43.4% of patients were matched to targeted therapies when combining DNA and RNA sequencing[89]. - The company has developed the tumor origin (TO) algorithm, which predicts the site of origin for cancer patients with unknown primary tumors, utilizing machine learning models trained on tumor RNA expression results from a de-identified multimodal database[74]. Business Model and Financial Performance - The company’s business model allows for monetization of de-identified data, creating network effects that enhance the value of its database and improve the precision of its tests[25]. - The company has a Remaining Total Contract Value (Remaining TCV) of more than $1.1 billion as of December 31, 2025, which includes approximately $300 million in potential future contractual opt-ins[103]. - Net Revenue Retention for the Insights product was approximately 126% for the year ended December 31, 2025, compared to the same cohort of customers for the period ended December 31, 2024[107]. - The average reimbursement for oncology NGS tests was approximately $1,600 in 2025, up from $1,450 in 2023, indicating a growth of about 10.3%[162]. - The company had received payment on approximately 55% of its clinical oncology NGS tests and 50% of hereditary tests from January 1, 2023, to December 31, 2024[162]. Clinical Trials and Research - The TIME Trial® program has signed more than 1,400 clinical trials into the network, identifying over 40,000 patients for potential enrollment as of December 31, 2025[116]. - The company has demonstrated that combining clinical and molecular data improved therapy matching, with 96% of patients matched to at least one clinical trial based on sequencing results and clinical data[90]. - Clinical oncology volume increased from approximately 31,000 samples sequenced in 2018 to approximately 367,500 samples in 2025, reflecting a significant growth in demand for sequencing services[95]. - The company has received approximately 6,500 tumor samples since 2017 for its Organoid lab, which supports drug screening applications across multiple cancer types[111]. Partnerships and Collaborations - The company entered into agreements with AstraZeneca and Pathos in April 2025 for the development of a foundation large multimodal model in oncology[171]. - AstraZeneca has committed to spend a minimum of $220 million on products and services under the Master Services Agreement (MSA) through December 31, 2026, with the potential to increase this commitment to $320 million by December 2028[176]. - Pathos will pay a total of $200 million in data license fees over three years, including an upfront payment of $50 million[173]. - Recursion Pharmaceuticals will pay an initial license fee of $22 million and an annual license fee totaling up to $160 million throughout the term of the agreement, which lasts until November 3, 2028[178]. - GSK has committed to spend a minimum of $180 million on products and services during the term of the GSK Agreement, with $70 million paid upon execution[177]. Regulatory Compliance and Quality Assurance - The company is subject to FDA regulations for its diagnostic products, which include requirements for product design, testing, and marketing[201]. - The company holds a current CLIA certificate for its laboratories, which must comply with standards for accurate and reliable testing[214]. - Laboratories performing high complexity testing must meet stringent requirements, including analytical validation for laboratory-developed tests (LDTs)[215]. - Non-compliance with CLIA and state regulations can lead to severe penalties, including license revocation and civil monetary penalties[217]. - The FDA has broad enforcement powers and can impose sanctions for non-compliance, including product recalls and operational restrictions[211]. Technology and Innovation - The company has developed proprietary software tools that allow for the abstraction of 50-100 discrete data elements per patient case in approximately one hour[191]. - The company has developed software applications like Hub and Lens to facilitate interaction with its Platform for healthcare providers and life sciences customers[70]. - The Hub application streamlines the ordering and tracking of laboratory tests, providing a comprehensive view of patient results over time[72]. - The Lens software application allows clinicians to filter a multimodal database to identify patient cohorts, facilitating data licensing opportunities without charge[76]. - The company aims to leverage AI and machine learning to identify care gaps in oncology and cardiology, enhancing patient outcomes[123]. - The company has integrated algorithmic diagnostics that utilize multimodal data to improve patient risk profiles and outcomes[125]. Sales and Market Strategy - The company employs approximately 205 sales representatives in the United States, primarily targeting oncologists and healthcare providers[141]. - The retention rate for physicians ordering more than 5 oncology NGS tests is 87% over a 12-month period[142]. - The company has approximately 30 sales executives in its Data and applications product line development organization as of December 31, 2025[149]. - The company aims to commercialize new clinical diagnostic algorithms through its existing provider network, leveraging its Diagnostics sales force[152]. - The company has a dedicated team focused on increasing the commercial adoption of its nP test for depression in the neuropsychiatry market[144]. Expansion and Growth - In February 2025, Tempus acquired Ambry Genetics Corporation, expanding its capabilities in hereditary cancer screening and entering new disease categories[58]. - The company’s acquisition of Ambry in February 2025 expanded its inherited risk screening capabilities for cancer and rare disease patients[87]. - The acquisition of Paige, Inc. in August 2025 enhances the company's capabilities in digital pathology, leveraging a dataset of nearly 7 million digitized pathology slide images[139]. - The company is focused on expanding its product offerings in cardiology, including algorithms for aortic stenosis and familial hypercholesterolemia[138]. - The company anticipates facing increasing competition from diagnostics companies and CROs as it expands its product offerings[156].