0001193125-26-066961
SEC filingTempus AI revenue surged 83% YoY to $1.27B driven by the Ambry acquisition and organic growth, while net loss narrowed significantly to $245M from $706M.
Tempus AI, Inc. describes itself as 'a technology company focused on healthcare that straddles two converging worlds.' The company endeavors to unlock the power of precision medicine by creating Intelligent Diagnostics through the practical application of AI in healthcare. Its core insight is that laboratory test results can be contextualized for a specific patient based on that patient's unique characteristics, guiding therapy selection and treatment decisions. The Tempus Platform comprises both a technology platform to free healthcare data from silos and an operating system to make the resulting data useful. The company has amassed what it considers one of the largest libraries of clinical and molecular oncology data in the world.
Tempus organizes its products under two product lines: Diagnostics and Data and applications. The Diagnostics product line leverages laboratories to provide NGS diagnostics, PCR profiling, and other anatomic and molecular pathology testing. Unlike other laboratory diagnostic testing providers, many of Tempus's tests are connected to clinical data, allowing the suite of tests to be self-learning. The Data and applications product line facilitates drug discovery and development for life sciences companies through multiple products, including Insights, Trials, Next, and Algos. Each product line is designed to enable and enhance the other, creating network effects. Revenue share by segment is not disclosed.
The Tempus Platform includes proprietary software and dedicated data pipelines that create a network of healthcare institutions through more than 700 unique data connections across more than 5,000 healthcare institution sites. Key products include: Hub (clinical application for physicians), Lens (application for life sciences customers), and a suite of diagnostic tests such as Tempus|xT (solid tumor NGS panel), Tempus|xF (liquid biopsy), Tempus|xG (hereditary cancer germline panel), Tempus|xR (full transcriptomic profiling), Tempus|xM (minimal residual disease), and Tempus|nP (pharmacogenomic testing for neuropsychiatry). The Data and applications product line includes Insights (data licensing), Trials (clinical trial matching), Next (AI platform to identify care gaps), and Algos (algorithmic diagnostics such as TO, HRD, DPYD, and Tempus Purist).
Tempus employs a direct sales force targeting healthcare providers and life sciences companies. The Diagnostics product line is commercialized through a dedicated clinical sales organization of approximately 205 sales representatives who call on oncologists, psychiatrists, and other healthcare providers. The Data and applications product line relies on a business development team of approximately 30 sales executives focused on enterprise sales to pharmaceutical and biotech companies. Tempus works with 19 of the 20 largest public pharmaceutical companies. Key strategic collaborations include AstraZeneca (minimum $220 million commitment through December 2026, expandable to $320 million) and GSK (minimum $180 million commitment through December 2027, with potential additional $120 million). As of December 31, 2025, signed contracts had a Remaining TCV of more than $1.1 billion.
Tempus faces increasing competition across its product lines. In Diagnostics, primary competitors include Foundation Medicine, Caris Life Sciences, Guardant Health, Natera, Neogenomics, ResolutionBio, Quest, LabCorp, Myriad Genetics, Genomind, GeneDx, Variantyx, and Baylor Genetics. In Data and applications, main competitors are Flatiron Health, IQVIA, ConcertAI, and CROs such as Fortrea, ICON, Syneos, and PPD. For Applications, competitors include PathAI, HeartFlow, and Eko Devices. Tempus believes it is substantially differentiated due to network effects, proprietary technologies, and its multidisciplinary teams.
Tempus's strategy centers on embedding AI throughout diagnostics to enable personalized, data-driven decisions. Key strategic pillars include: expanding the Tempus Platform to collect multimodal data at scale across multiple disease areas; leveraging network effects between Diagnostics and Data and applications to compound data value; developing and deploying algorithmic diagnostics (Algos) in oncology and cardiology; and driving adoption through a land-and-expand strategy with healthcare providers. The company aims to help physicians find the best therapies, help pharmaceutical companies make better drugs, and enable patient access to emerging therapies and clinical trials.
Tempus does not disclose total employee count in the Business section. However, it reports approximately 205 sales representatives in its clinical sales organization for Diagnostics and approximately 30 sales executives in its Data and applications business development team. The company employs individuals with expertise spanning multiple disciplines, including PhDs and other advanced degrees in machine learning, data science, and computational biology, as well as Medical Doctors practicing pathology and oncology.
For the fiscal year ended December 31, 2025, Tempus AI reported total net revenue of $1,271.8 million, an 83% increase compared to $693.4 million in the prior year. This substantial growth was primarily inorganic, driven by the acquisition of Ambry Genetics in February 2025, which contributed $362.7 million in hereditary testing revenue. Organically, the legacy oncology diagnostics business also expanded, with test volume increasing 26% to approximately 340,500 tests and average reimbursement per test rising to approximately $1,600 from $1,510.
The company's net loss narrowed significantly to $245.0 million from $705.8 million in 2024. This $460.8 million improvement was largely attributable to a non-cash reduction in stock-based compensation expense. In the prior year, the company recognized $534.1 million in stock-based compensation, primarily from RSUs with a performance condition satisfied upon the company's IPO. This expense decreased by over $400 million in the current period. Loss from operations improved to $(252.9) million from $(691.1) million.
Total cost and operating expenses increased 10% to $1,524.7 million, driven by the inclusion of Ambry's operations. Cost of revenues for diagnostics rose 59% to $386.1 million, while selling, general and administrative expenses decreased 3% to $731.7 million due to the aforementioned stock-based compensation decline, partially offset by $61.5 million in amortization of acquired intangibles and higher personnel costs from Ambry.
The Diagnostics segment was the primary growth engine, with revenue more than doubling to $955.4 million. This was fueled by the addition of approximately 460,500 hereditary tests from Ambry and a 26% increase in legacy oncology test volume. The average revenue per oncology test improved to approximately $1,600, driven by increased Medicare reimbursement rates. The Data and applications segment grew 31% to $316.4 million, driven by a $70.9 million increase in demand for Insights products from both existing and new pharmaceutical and biotechnology customers.
A significant shift in revenue mix occurred, with Diagnostics now representing 75% of total revenue compared to 65% in the prior year. This shift impacts overall margins, as the cost of revenues for Diagnostics is a higher percentage of its revenue than for Data and applications. The company's adjusted EBITDA improved substantially to a near-breakeven $(7.4) million from $(104.7) million, demonstrating progress toward operating leverage despite the dilutive margin impact of the Ambry acquisition.
Management expects to maintain high levels of investment in research and development and technology to support new assay development, algorithm creation, and platform expansion into new disease areas. The company anticipates that selling, general, and administrative expenses will continue to increase in absolute dollars but decrease modestly as a percentage of revenue over the long term. Strategic priorities include integrating the Ambry and Paige acquisitions to strengthen capabilities in hereditary testing and digital pathology, respectively. The company also highlighted its $750 million convertible notes offering and $500 million at-the-market equity program as providing ample liquidity to fund operations and potential future strategic investments for more than twelve months.
As of December 31, 2025, Tempus AI held $604.8 million in cash and cash equivalents, $150.2 million in marketable equity securities, and $4.7 million in restricted cash, totaling $609.5 million in cash and restricted cash. Total assets were $2.27 billion, up from $926.1 million a year earlier, driven by acquisitions (Ambry, Paige, Deep 6) and debt/equity raises. Total debt stood at $1.24 billion, comprising $728.1 million in convertible senior notes (net), $202.8 million in long-term debt (net), $208.7 million in convertible promissory note, and $100.0 million drawn on the revolving credit facility. Stockholders' equity was $491.3 million, compared to $56.3 million at end of 2024, reflecting the impact of the IPO, ATM offerings, and stock issued in acquisitions.
Tempus AI disclosed total purchase commitments of $182.6 million as of December 31, 2025, primarily related to non-cancelable data license and cloud computing agreements. The timing of these obligations is: $48.7 million within one year, $107.0 million in years 1-3, and $26.9 million beyond three years. Additionally, the company has operating lease obligations of $110.1 million in undiscounted payments, with $87.6 million recognized as lease liabilities. Remaining performance obligations on multi-year contracts totaled $348.1 million, of which 52% is expected to be recognized in the next year.
During 2025, Tempus AI repurchased 37,763 shares of Class A common stock for $3.0 million (treasury stock). No dividends were paid. The company raised significant debt: $726.5 million from convertible senior notes (net of discount), $196.0 million from long-term debt (net), and $98.0 million from the revolving credit facility (net). It also repaid $276.9 million of long-term debt. Capital expenditures were $21.0 million (1.7% of revenue). The company also entered into an ATM facility, selling 2.4 million shares for $195.5 million net proceeds, with $300 million remaining available.
The company operates as a single reportable segment. No segment-level operating income or margin is disclosed. Revenue is disaggregated into Diagnostics ($955.4 million) and Data and applications ($316.4 million). Geographic mix is not provided, but the majority of revenue is generated in North America.
Tempus AI reports persistent net losses of $245.0 million for 2025, $705.8 million for 2024, and $214.1 million for 2023, resulting in a $2.4 billion accumulated deficit. The company may require additional capital to fund operations, Platform development, and expansion. Existing $1.3 billion indebtedness, including $750 million of 0.75% Convertible Senior Notes and facilities with Ares Capital, imposes restrictive covenants that could limit flexibility.
A substantial portion of revenue depends on third-party payer coverage. Only 55% of oncology NGS tests and 50% of hereditary tests received payment on a trailing basis. Payer audits, retroactive offsets, and non-coverage determinations for certain tests create ongoing collection and revenue risk. International reimbursement approvals vary significantly by country and may require additional Health Technology Assessments.
Success hinges on continued access to and monetization of de-identified patient data under HIPAA as both covered entity and business associate. Failure to obtain consents or comply with evolving privacy laws could impair data use and product development. Integration of AI introduces risks of bias, toxicity, IP infringement, and regulatory exposure, including potential EU AI Act fines up to 7% of global turnover.
The company relies on limited suppliers, with Illumina representing 33% of vendor payments and serving as sole provider for sequencers and maintenance. Any disruption could halt laboratory operations. Rapid technological change and competition from Foundation Medicine, Guardant Health, Flatiron, and others could render products obsolete. The nascent Applications product line generated only 1.6% of 2025 revenue.
Dependence on Eric Lefkofsky and senior management, combined with dual-class stock structure concentrating voting control, creates key-person and governance risks. Limited operating history and rapid growth complicate evaluation of future prospects and execution of growth strategy.
No cash flow statement data, net income reconciliation, capex or working capital details available in the supplied excerpt. Auditor report confirms audit of cash flows for 2023-2025 but provides zero numeric values. Cannot assess CFO quality, FCF coverage or capital returns.