Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $149 million, down 2% year-over-year but up 2% sequentially, excluding one-time license and royalty revenue from Q2 [4][16] - Total consumables revenue was $127.9 million, up 1%, while Chromium consumables revenue was $92.5 million, down 4% due to lower average selling prices [16] - Gross profit for Q3 was $100.3 million, with a gross margin decrease to 67% from 70% the prior year, primarily due to changes in product mix and higher inventory write-downs [18] - Operating loss for Q3 was $32.2 million, an improvement from a loss of $41.5 million in the same period last year [18] - The company ended the quarter with $482 million in cash, cash equivalents, and marketable securities, reflecting a $35 million increase from the prior quarter [19] Business Line Data and Key Metrics Changes - Spatial consumables revenue was $35.4 million, up 19%, driven by strong demand for Xenium consumables [16] - Total instrument revenue was $12 million, down 37%, with Chromium instrument revenue at $4.9 million, down 36% [16] - Services revenue increased by 29% to $8.1 million, primarily due to an increase in Xenium service plans [17] Market Data and Key Metrics Changes - Americas revenue was $79.9 million, down 9% year-over-year, while AMEA revenue was $41.6 million, up 10% [17] - APAC revenue was $27.5 million, up 6% year-over-year but down 14% sequentially due to a customer-driven pull forward in Q2 [17] Company Strategy and Development Direction - The company is focused on advancing its innovation roadmap and driving greater adoption of its products, with recent product launches and partnerships aimed at addressing data analysis bottlenecks [6][11] - The introduction of the next generation of Chromium Flex is expected to enhance scalability and support AI-driven initiatives [8] - The company sees a growing opportunity in translational research and clinical applications, as evidenced by collaborations with institutions like CLI-SEQ and the Weizmann Institute [12][14] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing funding pressures and policy uncertainty but expressed confidence in the company's ability to navigate these challenges and invest in long-term growth [6][19] - The outlook for Q4 anticipates revenue in the range of $154 million to $158 million, reflecting a 5% growth compared to Q3 at the midpoint [19] - Management emphasized the importance of maintaining flexibility in customer engagements amid cautious spending behavior [6][19] Other Important Information - The company is experiencing strong customer enthusiasm for its products, particularly Xenium, which is becoming the preferred solution for spatial biology needs [10] - The partnership with Anthropic aims to make data analysis more accessible through integration with Claude for life sciences [11] Q&A Session Summary Question: Can you walk through how much of the expected 5% sequential pickup in Q4 is anticipated from instruments versus consumables? - Management indicated a potential uptick on the instrument side in Q4, factoring in the government shutdown's impact on guidance [25][26] Question: What are the contributions from Xenium and Visium in spatial consumables? - Management noted a consistent increase in usage of the Xenium platform, with a trend towards more runs and price per run [37][39] Question: Can you elaborate on early adoption trends for Xenium Protein? - Initial feedback on Xenium Protein has been positive, with customers excited about the capability to measure both proteins and RNA from the same sample [51][52] Question: What impact is the transition from NextGen to GEM-X expected to have? - Management stated that the bulk of the effects on P&L from this transition have already been realized, with remaining impacts being marginal [70] Question: How is the company addressing the macroeconomic challenges in the pharma segment? - Management acknowledged challenges in the pharma segment but noted positive trends in large-scale experiments and translational applications [60][61]

Core Thesis - Tempus AI, Inc. is positioned as a significant player in the healthcare sector, leveraging multimodal data and AI to create a comprehensive healthcare operating system [2][6] Company Overview - As of September 25th, Tempus AI's share price was $77.33, with a trailing P/E ratio of 36.85 [1] - The company has made strategic acquisitions, including Ambry Genetics, Deep 6, and Paige, enhancing its capabilities in genomics and pathology [2] - A joint venture with SoftBank in Japan has expanded Tempus' international reach, focusing on aggregating and labeling complex healthcare data [2] Technological Advancements - Tempus is involved in the development of "virtual cell" models that simulate cellular responses, which could revolutionize drug discovery and trial design [3] - The company has established partnerships, such as providing data to Recursion, which indicates the practical utility of its datasets in oncology [3] Leadership and Management - The leadership of Tempus, particularly CEO Eric Lefkofsky, is seen as both an asset and a potential risk due to his previous experience with Groupon and tight control over the company [4] - The management team includes a mix of startup builders and seasoned professionals from scientific and regulatory backgrounds, supported by a board with notable figures like Nobel laureate Jennifer Doudna [4] Financial Insights - Tempus AI has a market valuation of approximately $14 billion, with its trading more reflective of option value rather than cash flow [5] - The company is viewed as having significant upside potential if its data-driven model gains traction and adoption increases [5][6] Market Position and Trends - The stock price of Tempus has appreciated by approximately 79% since previous bullish coverage, indicating strong revenue and EBITDA growth [7] - Despite its potential, Tempus is not among the top 30 most popular stocks among hedge funds, with 27 hedge fund portfolios holding TEM at the end of Q2, up from 21 in the previous quarter [8]