Tempus AI, Inc. Q3 FY2026 earnings call

• Strong Growth Momentum: Total revenue grew 23% YoY, fueled by 32% unit volume growth in oncology and accelerating momentum in data and apps.
• Strategic Collaborations: Entered into significant partnerships including a $137.5 million five-year deal with Bristol-Myers Squibb (BMS) for oncology data, a $55 million deal with Pathos for Alzheimer’s disease datasets, and collaborations with Moderna and Merck for neoantigen therapies.
• EBITDA Turnaround: Achieved positive adjusted EBITDA of $25.6 million for the first time, signaling that gross profit dollar growth is now outpacing operational investments.
• Data Moat Expansion: Amassed over 600 petabytes of multimodal data, adding 50 petabytes in Q3 alone, connected to ~8,000 providers, reinforcing its position as an indispensable engine for healthcare innovation.
• Personalis Integration: Acquired Personalis to expand MRD capabilities, aiming to strengthen the multimodal data flywheel and accelerate commercial adoption in the estimated $20+ billion MRD market.

Total revenue reached $411.5 million, a 23% year-over-year increase. The Diagnostics segment generated $303.5 million in revenue (20% YoY growth), representing approximately 73.8% of total revenue; this was driven by Oncology ($172.6 million, up 28%) and Hereditary Cancer Testing ($111.3 million). The Data and Applications segment contributed $108.1 million in revenue (33% YoY growth), accounting for roughly 26.2% of total revenue, with the Insights licensing sub-segment growing 29%. Adjusted EBITDA was positive at $25.6 million.

• Raised full-year 2026 revenue guidance to $1.60–$1.605 billion.
• Maintained expectation for 2026 adjusted EBITDA to be approximately $65 million.

• Forward-looking statements are subject to risks and uncertainties detailed in SEC filings (10-K).
• Potential headwinds from proposed clinical outfeed schedule rates and PAMA cuts impacting hereditary cancer testing ASPs.
• Personalis acquisition remains pending regulatory approval and carries integration risks, including current cash burn.

Q: Kyle Mixon asked about potential headwinds from PAMA cuts on hereditary cancer testing ASPs and the diagnostics outlook for 2027. / A: Eric Lefkofsky noted hereditary business is stabilizing as it laps excessive prior growth, with unit growth returning to low double digits. Jim Rogers clarified no material PAMA impact expected on hereditary ASPs, but highlighted ~$80 million oncology ASP uplift in 2027 due to FDA approvals for XT and XF tests.

Q: Mark Massaro inquired about the timeline for un-gating the full sales force to sell MRD tests post-Personalis acquisition. / A: Eric Lefkofsky explained that ramping depends on achieving positive per-test gross profit, which is near-term via colorectal cancer reimbursement. He expects the 'unlock' mid-to-late 2027, driving strong growth into 2028.

Q: Bradley Bowers asked about the competitive landscape and market share expectations for MRD within Tempest’s portfolio. / A: Eric Lefkofsky stated Tempest is best-in-class and aims to be #1 or #2 in MRD, similar to its leadership in solid/liquid tumor profiling. He emphasized that integrated technology and AI make Tempest the preferred choice for physicians.

Q: Evie Koslowski questioned how AI modeling impacts customer stickiness and what percentage of clients utilize it. / A: Eric Lefkofsky described a shift from transactional data downloads to sticky, long-term subscriptions where clients build models on Tempest’s GPU clusters. This creates high switching costs and deepens relationships.

Q: Subbu Nambi sought details on the drivers behind excess order acquisitions and liquid vs. solid tumor growth trends. / A: Eric Lefkofsky attributed strength to concurrent testing benefits and serial testing trends. He noted liquid is beginning to outperform solid tumor profiling by 300-400 bps, suggesting robust near-term growth for liquid and MRD.