Tempus AI's Data Business Is Expanding and Adding to Revenues: Here's How

Core Insights - Tempus AI's third-quarter 2025 results indicate a significant growth in its Insights and Data & Services business, which is becoming a high-margin revenue stream beyond traditional genomic testing [1][8] - Data and Services revenues reached $81.3 million, reflecting a 26.1% year-over-year increase, primarily driven by Insights (data licensing) [1][8] Business Performance - Insights bookings amounted to $150 million, showcasing a 37.6% year-over-year revenue growth, supported by a substantial foundation model deal signed earlier this year [2] - The company is effectively monetizing its extensive multimodal dataset, which includes genomic, clinical, imaging, and digital pathology information, alongside AI-powered insights and algorithms [2] Strategic Developments - Tempus enhanced its data and AI capabilities through the acquisition of Paige, a leader in digital pathology, which improves its dataset and technical expertise [3] - The collaboration with Northwestern Medicine has been expanded to integrate David, Tempus' generative AI clinical co-pilot, into the EHR platform, aiming to streamline clinical workflows [3] - Tempus Next has broadened its focus into breast cancer, providing real-time insights to assist clinicians in closing guideline-based care gaps [3] Market Position - Tempus is transitioning from a diagnostics-focused company to a differentiated data-driven precision medicine platform, with increasing potential for recurring revenue [4] - Over the past year, Tempus shares have increased by 10%, outperforming the industry, which saw a 4.1% decline [7] Valuation Metrics - Tempus currently trades at a forward 12-month Price-to-Sales (P/S) ratio of 8.18X, compared to the industry average of 5.81X, indicating a relatively expensive valuation [9]