Tempus AI Inc (TEM) Q1 2026 Earnings Call Transcript
Tempus AI, Inc. operates as a healthcare technology company. It engages in providing next generation sequencing diagnostics, polymerase chain reaction profiling, molecular genotyping, and other anatomic and molecular pathology testing to healthcare providers, pharmaceutical companies, biotechnology companies, researchers, and other third parties. The company offers Insights, a license library of linked clinical, molecular, and imaging de-identified data, as well as a suite of analytical services to analytic and cloud-and-compute tools to pharmaceutical and biotechnology companies; and Trials that provides clinical trial matching services to pharmaceutical companies. In addition, it operates Next; Algos, a suite of algorithmic tests in oncology; Hub, a desktop and mobile platform for ordering, managing, and receiving tests and patient results; and Lens, a platform for researchers and scientists to find, access, and analyze Tempus data. The company has a strategic collaborations agreement with AstraZeneca and Pathos AI, Inc. to develop therapeutic programs in oncology. The company was formerly known as Tempus Labs, Inc. and changed its name to Tempus AI, Inc. in January 2023. Tempus AI, Inc. was incorporated in 2015 and is headquartered in Chicago, Illinois.
Tempus delivered robust 2025 results with accelerating Diagnostics and Data growth, strong ARR-like metrics, and a clear path to $1.59B revenue in 2026 alongside AI-driven moat and profitability expansion.
⭐ Key Highlights
✔Positive Signals
- Core revenue growth of >33% in 2025 driven by Ambry
- Diagnostics momentum: 29% oncology and 56% MRD QoQ growth
- Data licensing growth of 69% in the quarter with 126% net revenue retention
- Bookings imply >$1.1B in contract value and strong 2026 revenue guidance ($1.59B) with positive EBITDA
- Advancement of foundation model and AI moat with scalable compute and AZ collaboration
✖Negative Signals
- Hereditary growth expected to moderate in 2026 and potential lumpiness
- MRD reimbursement timing (MolDx) introduces near-term uncertainty
- ASP trajectory includes transitions (LDT to FDA-approved) that may affect near-term mix
- Some 2026 growth drivers depend on external approvals and payer coverage
- Integration and execution risk around deploying foundation-model-based insights across the portfolio
📊Financial Results
- Core revenue growth exceeded 33% in 2025, boosted by the Ambry acquisition
- Diagnostics: Oncology unit growth 29%; MRD testing 56% QoQ; Hereditary 23%
- Data/Insights licensing grew 69% in the quarter; projected ~40% growth in the next quarter; TCV >$1.1B; NRR 126%
- ASPs were ~$1,640 in Q4, up ~$40 QoQ; expected ASP uplift driven by xT CDx transition to FDA-approved version and future xF (liquid biopsy)
- Guidance: 2026 revenue of $1.59B with ~$65M of adjusted EBITDA; 2026 bookings imply strong visibility into in-year revenue
🔮Future Guidance
- 2026 revenue guidance of $1.59B and approximately $65M of positive adjusted EBITDA
- Data revenue growth expected around 40% in the next quarter; higher ASPs anticipated from FDA-approved mix and payer progress
- TCV in excess of $1.1B provides strong revenue visibility for 2026
- xT, xR, xF, xH, and xE platform growth supported by foundation-model efforts; ASPs expected to rise as FDA-approved versions expand
💡Interesting Insights
- Tempus has amassed over 450 petabytes of proprietary, multimodal data and connections to 5,500+ hospitals, enabling a defensible AI data moat that is difficult for competitors to replicate
Detailed Analysis
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