Tempus AI - Earnings Call - Q1 2025

Transcript

Operator (participant)

Good day, everyone, and thank you for standing by. My name is RG, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Liz Krutoholow, VP for Investor Relations. Please go ahead.

Liz Krutoholow (VP of Investor Relations)

Thank you. Good afternoon, and welcome to Tempus' First Quarter 2025 Conference Call. This afternoon, Tempus released results for the quarter ended March 31st, 2025. The press release, an overview of the quarter, and our latest presentation are available on our IR website. Joining me today from Tempus are Eric Lefkofsky, Founder and CEO of Tempus, and Jim Rogers, CFO. Before we begin, I would like to remind you that during this call, management may make forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For discussion of these risks, please refer to our 10-K and other filings with the SEC. During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Definitions of these non-GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial measures, are included in our First Quarter Earnings release, which has been furnished to the SEC and is available on our website at investors.tempus.com. I would now like to turn the call over to Eric.

Eric Lefkofsky (Founder and CEO)

Thank you. Thanks for joining us today. Q1 was a record quarter for Tempus, and we're off to a great start. I'll provide just a super quick overview, and then we can take questions. Quarterly revenue increased 75.4% year-over-year to $255.7 million. Genomics revenue was $193.8 million, which is about 89% year over year growth. Oncology testing, which is how we're going to refer to our legacy Tempus clinical testing, grew 31% year-over-year with approximately 20% volume growth. Hereditary testing, which is how we're going to refer to the legacy Ambry Genetics business, contributed $63.5 million in revenue and grew its units by 23%. Revenue from data and services totaled $61.9 million, which was about 43% year-over-year growth, led by our insights or data licensing business, which grew 58% year-over-year.

We generated $155.2 million in quarterly gross profit, which was 99.8% growth year-over-year. Adjusted EBITDA was negative $16.2 million in the first quarter of 2025 compared to negative $43.9 million in the first quarter of 2024, which was an improvement of $27.8 million year-over-year. As a result, we're increasing our full year 2025 revenue guidance to $1.25 billion, representing about 80% year-over-year growth. I would say all in, the company's performing super well, which was in my quote. Revenues are up, gross profit is up. Both are growing nicely. We're managing our costs, which is producing nice year-over-year operating leverage.

In addition, I'll highlight just one other big piece of news, which we put out about a week ago, which is we announced a three-year $200 million data and modeling license agreement with AstraZeneca and Pathos in April to build the world's largest foundation model in oncology. This is big for a few reasons. One is it brings our total remaining contract value to greater than $1 billion as of April 30th. It also allows us to take our over 300 PB of data, which includes this really rich multimodal data set connected to outcomes, and use that to build a foundation model, which is, in addition to the data licensing, which is quite positive for us. Also, the cost of compute is not small, and AZ and Pathos are covering a significant portion of that.

When the model's complete, which we expect the first version of the model will be complete in about nine to 12 months, each party will get a copy: AstraZeneca and Pathos to advance their drug discovery efforts and Tempus to advance its diagnostic and data products. Given that AstraZeneca is our longest standing client, actually was our first strategic collaboration, we could not be more excited to be expanding our relationship in such a significant manner. I think kind of further validating the value we are providing to lots of biopharma clients. It is also worth noting this is a non-exclusive agreement. We can essentially license data and build models with others, and we hope to do so in the future. As such, this represents an entirely new category for us. It is also important in that it is a giant step in making precision medicine a reality.

We're closer than ever to understanding at a molecular level why patients do and don't respond to cancer treatments. We believe models like this will bring all kinds of insights into clear focus. We can see a day when our diagnostics are so smart that they're actually playing a critical role in ensuring every patient's on the optimal therapeutic path and that drug companies are far more efficient, ideally in a perfect world, having clinical trials that fail far less often. On that note, we're happy to take questions.

Operator (participant)

Thank you. At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. To ensure we get to as many participants as possible, we ask each analyst to please limit your question to one. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Tejas Savant from Morgan Stanley. Please go ahead.

Tejas Savant (Executive Director and Senior Healthcare Equity Analyst)

Hey, guys. Good evening and appreciate the time here. Eric, congrats and a clean start to the year. I want to ask a two-parter on the AZ/Pathos deal that you just highlighted as well. First up, can you just share some color on follow-up conversations with other pharma companies about the possibility of similar deals for foundational model development in oncology? What is it about the Pathos approach that really is the hook here for drug developers? On the deal again, one for Jim. I want to dig a little bit into the deal structure here. It's a little bit sort of complicated. As we think about the rev rec on this $200 million amount, there's that $50 million upfront fee from Pathos to you guys, but then you guys are also paying them, I think, $35 million.

In terms of upfronts, you also get an AZ, I think, paying $35 million. Just pass that out for us in terms of how you expect it to play out on the P&L and then the $150 million residual from Pathos. I think there's a stock component in it as well. Just unpack that a little bit in terms of the next three years and how it flows through the P&L. Thank you.

Eric Lefkofsky (Founder and CEO)

Yeah, I can start and then Jim can jump in. After we announced this deal, obviously, there was quite a bit of excitement among other companies. We work with, I think, 19 to 20 largest pharmaceutical companies in oncology and have good relationships with a bunch. People were quite interested. AstraZeneca is one of the leaders in oncology and has had a really strong track record over the past four or five years. I think people were particularly focused on what this was going to mean for them going forward and how they should try to bring it into their own practice. Some of those conversations have already kicked off. I would say the excitement has been greater than I thought it was going to be. I had pretty lofty expectations, so that's awesome.

These are big deals, as Jim will cover in a second. This is $200 million of data licensing and real data revenue. Somebody's got to be willing to sign up for something that significant. It's expensive. Even though there's a ton of excitement, we have to turn that into tangible agreements and tangible projects and kick those off. In the case of AZ and Pathos, AstraZeneca was a client of ours. They also had spent some time with Pathos and got to know that team. I think independent of the Tempus relationship, they were exploring some different ideas together.

I think when we began discussing this idea of building a foundation model, it made sense for them to want to have this be a three-way agreement whereby they could make a sizable investment and commit some of the attributes they have, but they also could leverage a bunch of work that Pathos had done and then obviously leverage our data and the work we had done. It came together as a three-way partnership, but just as easily could have come together as a two-way partnership between us and the pharmaceutical company and not involve Pathos. I'll let Jim cover the rev rec.

Jim Rogers (CFO)

Yeah. In terms of the revenue recognition, I think the easiest way to think about it is we have a $200 million kind of data license to Pathos that is specifically related to building the foundational models. The data can only be used for that purpose as AZ, Pathos, and Tempus work together to build that foundational model. There are some cash flows between AZ to Tempus over to Pathos, but there's no revenue recognition impact of that. The $200 million will be recognized. It ramps a little bit over the three-year period, but roughly ratably over the three-year term during which the model will be built. This license is no different than the other large subscriptions that we have. The upfront payment from Pathos to Tempus doesn't trigger any revenue recognition upon that payment.

It's a three-year subscription similar to the other large multi-year deals that we currently have.

Eric Lefkofsky (Founder and CEO)

Yeah. One last piece. The first payment was made in cash. At this point, even though Pathos could make some payments in the future in part cash, part stock, we have every reason to think they'll make it in cash. It is very possible that we just collect cash the entire time.

Operator (participant)

Your next question comes from the line of Ryan MacDonald of Needham & Company. Please go ahead.

Ryan MacDonald (Senior Analyst)

Thanks for taking my questions. Congrats on a great quarter. Maybe you could talk about the hereditary business. I think the original expectation as that was integrated, as Ambry was integrated, was sort of maybe a mid to high teens growth rate for this year, but obviously kicking off the year at a much faster rate in around 23%. Can you just maybe talk about what surprised you to the upside in terms of the performance of that business and maybe how durable the sort of mid-20s growth rate was? Thank you.

Eric Lefkofsky (Founder and CEO)

Yeah. I mean, obviously it's early, so there's no point getting too ahead of our skis. We talked about this, I think, when we announced the Ambry acquisition, which was there was this kind of narrative that hereditary screening was either kind of in the twilight or sunset of its horizon or had become commoditized. We just obviously couldn't feel more strongly that that's not accurate. I mean, I could foresee a day when tens of millions of people get this kind of sequencing on a regular basis, not just to understand their inherited cancer risk, but their inherited cardio risk, their inherited Alzheimer's risk, their inherited risk of developing an immunological disorder later in life. The target audience of people that might be at risk of disease is obviously much greater than the audience of people that have disease, generally speaking.

I think long term, we suspect Ambry will grow at high rates. In the near term, we told people we thought the growth rate would be mid to high teens. In large part, because they experienced a lot of rapid growth previously, so you're lapping that period. Yes, the business is performing really strong. That may continue, but we're not here to kind of highlight that for folks. We're watching it month-to-month, but so far they're firing on all cylinders and we see no sign of that slowing down.

Operator (participant)

Question comes from the line of Mark Schappel of Loop Capital. Please go ahead.

Mark Schappel (Managing Director)

Good evening. Thank you for taking my question and a nice job on the quarter. Eric, I have a question around the Deep 6 acquisition that was made during the quarter. I was wondering if you could just provide some additional details around what capabilities Deep 6 brings that you already did not have.

Eric Lefkofsky (Founder and CEO)

Yeah. We also talked about this, I think, last quarter, which is that we felt like we had a really comprehensive molecular offering that with the acquisition of Ambry, we felt really good that between our MRD offerings and our therapy selection offerings and now our hereditary offerings, we felt really good and that if we were to make any acquisitions, they would likely be smaller and likely be on the data and services side. That, by the way, is exactly what Deep 6 is.

Core to our business model is obviously combining large amounts of clinical and molecular data and being able to build these really rich data sets where you can understand at a molecular level what's happening to a patient and then connect all those rich molecular insights to outcome and response data over time and say, "Okay, if this is the molecular composition of this patient, this is the DNA profile, the RNA profile, the germline profile, the methylomic profile. This is the molecular profile of the patient. What drugs did they take? How did they respond? What adverse events did they have? How long were they on that drug? What was their progression-free survival? What was their overall survival?" All that clinical data. You have to have rich connections to pull that clinical data.

We also mentioned this quarter, we're now over 4,000 connections, which is up significantly from the past. Deep 6 is a part of adding more connectivity, especially to some really high-quality institutions. They built a product that allows providers to interrogate their own data sets to advance analytics, to get people on their own studies and clinical trials. That product has good product-market fit. People like it. It allows us to kind of have another connection point to providers, another reason for them to share their data with us, another reason to be on our platform. That bidirectional feed of data, people sending us their clinical data, we're generating some molecular insight, we're putting the insight back into the hands of providers.

That is at the core of how we build these very large data sets, which are now in totality like 40 million patients or something. It has become a huge data set.

Operator (participant)

Your next question comes from the line of Subbu Nambi of Guggenheim. Please go ahead.

Subbu Nambi (Director in Equity Research Department)

Hey, guys. Thank you for taking my question. I had one model-related question and one long-term. For the model-related, could you remind us the assumption baked in on gross margin and ASP improvement if you do receive MolDx xM reimbursement before the end of the year? If it's not baked in, could you quantify the upside? The long-term question was, when you do flip EBITDA positive, you said you're looking to invest back into the business. Curious, what are you looking at right now with the most ROI in 2025 and if that wish list changes at all as a result of flipping to profitability? Thank you.

Jim Rogers (CFO)

Yeah. I'll take the first question then Eric can take the second one. In terms of the ASP progression, obviously we saw about a $60 increase in our oncology ASPs in Q1, largely the result of us migrating our xT volume over to the ADLT version or the FDA-approved version of that assay, which has a higher ASP with Medicare. There was also a small impact from some ASP improvements for our liquid biopsy code as well. In terms of the progression over the balance of the year, we said that by the end of Q1, about 20% of our xT volume would be migrated to the FDA-approved version. That's where the number kind of came in at. We will continue to migrate more over the balance of the year, targeting about 40% by the end of the year.

The ASP improvements for the balance of the year largely come from just migrating xT volume from ADLT to the FDA-approved version. We have not baked in any xM reimbursements. We submitted our first CRC xM to MolDX in January. That process is playing out, and we would not anticipate anything until later on in the year. We have not baked any of that into the ASPs.

Eric Lefkofsky (Founder and CEO)

In terms of kind of how we think about EBITDA and investments and ROI, it was very important to us, as we have said historically, that we are EBITDA positive by the time we turn 10, which is this year. We will turn 10 this year. I think we are on track as providing our guidance to be adjusted EBITDA positive this year, which is a big milestone for us, especially given that there are other companies that are older than us, similarly situated, that are still losing $100 million a year to $100 million a year. We feel really good that we have these rapid growth rates and kind of often best-in-class growth and the business producing lots of gross profit and lots of leverage. We are able to run it in an EBITDA positive manner, adjusted EBITDA positive manner.

The issue for us, I think, is when you look at the opportunity set to bring AI to healthcare at scale, it's not small. You don't want to underinvest and just try to maximize every dollar of profit at the expense of long-term sustained growth and then miss out on what could be one of the biggest technology opportunities of all time. We're mindful of that. In particular, there's lots of places to invest in both of our main businesses. For example, in genomics, the MRD space is super exciting. We've got a tumor naive platform that we believe in. We're running all kinds of studies in different disease areas. We continue to make those. We're making those investments now. We made them last year. We'll make more in the future.

We feel good about those investments, but it's certainly an area to put money to. The others in terms of building out our core AI applications and product set, including the foundation model that powers a lot of this, you're constantly investing in data and compute, and those are not inexpensive. We make lots of investments. Again, we made them last year. We make them this year. We'll make them next year. Make lots of investments in data and compute to be able to bring AI to diagnostics at scale. We are fortunate that the landscape in front of us is open. We have lots of things we would love to invest in. We are also disciplined in that we're not going to try to get ahead of our skis and make sure that we're investing appropriately.

I think lucky that these things are all coming together in a really nice way where the growth is producing lots of additional dollars that we can invest to drive future growth.

Operator (participant)

Your next question comes from the line of Daniel Brennan of TD Cowen. Please go ahead.

Daniel Brennan (Managing Director and Senior Equity Research Analyst)

Great. I was hoping maybe you could just speak to the first question would just be on the genomics volumes. Just give us a sense on some competitive talk about some weather-induced issues in the first quarter. 20% was kind of towards the lower end of the range. Just wondering kind of how the quarter played out for expectations, how you think volumes will kind of play out throughout the rest of the year. Then b, just on the insights business, super helpful upfront with the Astra deal. There is some wondering. What else could you say just in terms of how that business is going, what the funnel looks like? Any qualitative color you can provide about the demand trends on your insights business.

Eric Lefkofsky (Founder and CEO)

Yeah. I'll take the first. I don't know about weather. I mean, weather could have played some impacts. We certainly had many days when FedEx was delayed or parts of the country were shut down. We don't spend a ton of time focused on that because we don't think of ourselves as just a lab. That's not our only business. We're kind of micro-fixated on it. We consider 20% growth, given our scale, given our volume, given the volume of tests that we're running, to be pretty extraordinary. When you look at the unit growth of Tempus in the aggregate, I think we delivered something like 158,000 tests this quarter. Anytime you've got something delivering 158,000 billable orders, that is growing units not only in double digits, but in the 20%+ range, it's pretty good.

We're way more focused on long-term sustained growth than we are on short-term growth. If we ever have a choice to grow at 20% for six or eight quarters or ten quarters versus 22% or 23% for one quarter, we'll always choose the former.

Jim Rogers (CFO)

Yeah. On your second question, Dan, regarding the insights business and the data and services business, it's also off to a good start. As we mentioned, the whole data and services business growing more than 40%, the insights business growing 58%. We were very fortunate coming into the year. We had $940 million of contract value that was yet to be delivered. Delivering on those subscriptions and then adding additional deals in Q1, obviously the highlight coming in April with the AZ, which pushes the total remaining contract value over a billion dollars for the first time ever. That forward-looking visibility that those contracts provide allow us to feel really confident about the data number for the balance of the year and into the next several years.

Operator (participant)

Your next question comes from the line of Mark Massaro of BTIG. Please go ahead.

Mark Massaro (Managing Director and Life Science and Diagnostic Tools Analyst)

Hey, guys. Thank you for taking the questions. The first one is for you, Eric. I was just curious if you could speak to how you think you can leverage your advantage with data and collaborations with pharma to some of your earlier traction in the MRD space. If you could speak to how you see the tumor-naive opportunity, but also how you see the tumor-informed opportunity coming together with your partner. I will ask the second question, which is, can you speak to any puts and takes on any tests in your broader portfolio that might be picking up share in the marketplace? Thank you.

Eric Lefkofsky (Founder and CEO)

Yeah. Let's start with the first. I think, look, long-term, we have said this for years. We believe that AI and technology are the primary differentiator of diagnostics, which is kind of complicated because we spend so much time on the diagnostic side talking about sensitivity and specificity and limited detection and this study and that test and this 500 genes and 1,000 genes. We fundamentally believe that is not the differentiator. We're in a migration that we've been in for some long period of time where sequencing is getting less expensive. I suspect over time, we're all doing whole genome, whole transcriptome, and the like quite regularly. That's the bioinformatics landscape of the future. What differentiates these tests is what insights can you derive for a clinician or a patient off of this massive amount of data?

That is where I think Tempus is so differentiated. Yet we kind of do not spend a lot of time ever talking about it, which is fine because you want to see when it shows up. If you look at the foundation model we are building, what it is essentially doing is pouring in an enormous amount of data, right? Hundreds of PB of data looking for associations between vast amounts of molecular data that we have been unable to ever interrogate connected to vast amounts of outcomes. Likely what should show up is all kinds of associations that none of us ever knew existed. For example, if I am a non-small cell lung cancer patient, one of the first things the NCC guideline would tell me is I should be profiled to see if I am EGFR positive. If I am EGFR mutated, I should get an EGFR inhibitor.

The challenge is about half the patients that get that drug respond. The other half do not. Even the half that do respond have different variations of response. Some might be on that drug for a year. Some might be on that drug for a decade. We have no way of stratifying those patients. In cancer, the name of the game is to generate more insights earlier in the process. I suspect AI and technology will produce that. I hope it is Tempus, but some company like Tempus will one day understand whether or not a patient is going to respond to an EGFR inhibitor before they ever go on the drug. Once you have that kind of information, you can design truly intelligent, personalized diagnostics. That is going to hold true for therapy selection. That is going to hold true for hereditary. That is going to hold true for MRD.

We are going to know with far greater granularity, not just whether or not a patient is likely to recur, which these tests are amazing in their ability to see recurrence long before a scan, but also how to intervene. What it means when we see these signatures, whether they are methylomic signatures or whether they are just fragments of mutations in the blood, what does it mean? How do we analyze them? Is this patient likely going to have a very bad recurrence? Is it going to be mild? Do we have a short amount of time, long amount of time? How aggressive should we be? All these insights will be data-driven, I think.

I would suspect that for both our tumor-naive and tumor-informed products, we enhance them and eventually, I think, make them totally differentiated from anything else out there by virtue of our investments in AI technology and the data that we have been able to amass, which others just do not have.

Jim Rogers (CFO)

In terms of the performance of the different assets that we have in market today, I'd say we saw growth across the entire portfolio. Obviously, with MRD, we're still kind of metering the volume given the lack of reimbursement. We wouldn't anticipate volumes growing tremendously there only because since we don't have reimbursements, we're bearing the cost of running those tests. The core assays kind of all performing well in the quarter.

Operator (participant)

Again, as a reminder, if you would like to ask a question, press star one on your telephone keypad and please limit your question in to one to ensure we get to as many participants as possible. Your next question comes from the line of Michael Ryskin of Bank of America. Please go ahead.

Michael Ryskin (Research Analyst)

Great. Thanks for taking the question, guys. I'll ask one. Maybe it has multiple parts, but I promise it's only one question. I just want to make sure sort of tying your earlier comments on Pathos on sort of how Ambry performed in the quarter, just sort of what's included in the or what are your assumptions that add up to the new revenue guide for the year, the $1.25 billion I mean, you're raising it by $10 million versus prior. Does that include Pathos contribution? It sounds like it does. But if you just take that $200 million and prorate it over 12 quarters, just sort of how much of that is in there? And then previously you talked about Ambry, high-teens growth, the legacy Tempus business around 30%. Is that still unchanged? Just want to parse out the moving pieces of the guide change. Thanks.

Eric Lefkofsky (Founder and CEO)

Yeah. I mean, Jim and I can both answer. Certainly in the guide, there is some amount of the new Pathos AZ revenue. We start every year. We have a very high degree of visibility to our revenue, especially our data revenues, but not 100% visibility. We always expect to sign a certain amount of revenue that we both sign and deliver in the year. That has been the case for some period of time. We are fortunate that here we are, it is whatever, May, and we are so far ahead, which is awesome. This thing is going to ramp over time. We do not have, obviously, we only have a partial year anyway. We had some, we always had planned to go get some additional revenue. We feel like this is appropriate.

We also are being, I think, appropriately conservative in terms of Ambry and its growth rates and how they perform the balance of the year. Could there be some upside there? Sure. At this point, our job is to basically kind of say, "Hey, this feels like an appropriate place to be." We are glad that we raised, by the way, we raised guidance last quarter by $10 million. We just raised it again by $10 million. We are kind of $20 million above where we were, I do not know, 90 days ago. We feel like we are in the right place, but we do not want to get out of our skis.

Operator (participant)

This question comes from the line of Rachel Vatnsdal of JPMorgan. Please go ahead.

Rachel Vatnsdal (Executive Director for Equity Research)

Hey, good afternoon. Thanks, you guys, for taking the questions. I wanted to dig into the data side of the portfolio and specifically what you're seeing on the TCV. Just given what we've seen from a macro sense, there's a lot of noise out there in regards to biotech funding, but also pharma, these potential tariffs and everything as well. Can you talk about the risk that you see given this choppier macro environment that you could see some of the TCV either canceled or pulled out of that backlog? We've also heard some of the CROs kind of talk about these elevated cancellations in both preclinical and clinical studies. Curious, how are you assessing that risk and have you seen any impact so far?

Jim Rogers (CFO)

Yeah. So just a reminder on the data business, we kind of have two customer groups. We work with 19 of the top 20 large pharma companies and then a couple hundred biotechs. Obviously, the majority of the TCV and the revenue comes from the large pharma companies that have larger R&D budgets, but we do work with a number of biotechs. Certainly on the biotech side, there has been some impact over the last, call it, 24 months of the lack of funding and kind of that coming through. Again, that represents a smaller percentage of our overall business. The relationships with big pharma tend to be multi-year subscriptions that are committed. We are delivering the data that they have agreed to license over these terms. We have not seen a significant impact on the large pharma side.

I'd also add that when budgets tend to be slashed or cut, we actually see a little bit of a benefit to the data business because leveraging the types of data that we license folks allows them to more effectively design their trials or identify targets in a more effective way. We actually see a little bit of a benefit on the data side when it comes to budget being shrunk because they can leverage our data, be more efficient, and kind of stretch those dollars. That's what we've seen in the market.

Operator (participant)

Your next question comes from the line of Dan Arias of Stifel. Please go ahead.

Dan Arias (Managing Director)

Hi, guys. These are the questions. Eric, on MRD, obviously a lot going on in that space. You guys are coming up on one full year, I believe, of commercial availability for the xM assay. What's gone the way that you expected within your program? What's been a bit of a surprise? What would you say are the key things over the course of the next year in order to feel like you're on track and successful?

Eric Lefkofsky (Founder and CEO)

Yeah. I mean, our portfolio, just to remind people, includes our tumor-naive assay in colorectal cancer, and it includes Personalis' tumor-informed assay in non-small cell lung, breast, and IO response. We kind of run the market in four areas, four very big areas. We are managing volumes and metering volumes because none of these assays are currently reimbursed by MolDX. Not our assay, not their assay. We run these tests, but we do not get paid. We are metering volume. Otherwise, you could burn a lot of money. I would say that the demand has been quite strong. We have been pleasantly surprised that there is a ton of interest in both products. I think there is a space for naive and a space for informed. Informed is clearly winning the day today because it has improved sensitivity and specificity. It has got lower limits of detection.

Natera has done a great job seeding the market. Informed is kind of the more conventional way people think about MRD today. We're fortunate that Personalis' platform is really best in class in terms of a bunch of those metrics because it's whole genome-based instead of whole exome-based. I think people want it, and I would suspect the volumes will be really strong once we ungate it. In terms of tumor-naive, we're all doing a bunch of work, us and other people that have those products to keep improving those assays, make sure that they perform well. I think they perform quite well today. Ours certainly does. Performs quite well, especially in those instances where you don't have extra tissue, where you can't rerun a whole genome tumor-informed assay because you just literally don't have the tissue.

In certain areas like non-small cell lung cancer, where you have scant tissue to begin with, I think those products will perform really well. I would say it's early days, but everything is moving along quite nicely, and I have not been negatively surprised in any big way. It's always kind of when you start a new product, you learn all kinds of stuff. So far, I think we feel really good about our long-term positioning in MRD.

Operator (participant)

That ends our Q&A session, and we appreciate your participation. I will now turn the call back over to Liz Krutoholow, VP for Investor Relations. Please go ahead.

Liz Krutoholow (VP of Investor Relations)

Thank you all for joining us today. As always, we're available for any follow-up questions. We look forward to updating you again next quarter.

Operator (participant)

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.