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Tempus AI, Inc. (TEM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue grew 35.8% year-over-year to $200.7 million; gross profit rose 49.7% to $122.1 million, driven by strength in Data & Services. Adjusted EBITDA improved to $(7.8) million and GAAP net loss narrowed to $(13.0) million .
  • Management raised 2025 revenue guidance to approximately $1.24 billion and guided to positive 2025 Adjusted EBITDA of about $5 million; sequential phasing implies ~20% of full-year revenue in Q1 given seasonality .
  • Total Remaining Contract Value ended 2024 at $940 million with 140% net revenue retention, supporting visibility into 2025 despite “lumpy” bookings; one >$10 million data delivery slipped from Q4 to early 2025 (timing, not demand) .
  • Ambry Genetics closed on Feb 3, 2025; combined platform expands hereditary testing and payer relationships. Management models Ambry high-teens growth in 2025 as it laps 2024 accelerants, with Tempus core nearer 30% .
  • Reimbursement catalysts: xT CDx received ADLT status at $4,500/test and CMS reimbursement for ECG-AF algorithm at $138; in-network wins with Blue Cross IL/CA and Avalon will support ASPs over time .

What Went Well and What Went Wrong

What Went Well

  • Data & Services delivered a strong quarter: revenue up 44.6% YoY to $80.2 million; segment gross margin reached 79.5% GAAP and 80.3% non-GAAP, lifting consolidated gross margin to 60.8% .
  • Contracting momentum and retention: 2024 ended with $940 million TCV and 140% net revenue retention; management highlighted larger subscriptions with committed spend and quarterly delivery cadence .
  • Guidance and profitability trajectory: 2025 revenue guidance increased to $1.24B; company expects to be Adjusted EBITDA positive ($5M), a ~$110M improvement versus 2024, reflecting operating leverage and mix shift .
    Quote: “Our revenue growth accelerated to 35.8%… gross profit was growing even more rapidly… we expect to be adjusted EBITDA positive and generate about $5 million” — Eric Lefkofsky .

What Went Wrong

  • CRO softness and timing of deliveries: Management cited softness in CRO revenues and a >$10M data delivery that naturally timed into early 2025, muting Q4 reported revenue despite underlying demand .
  • Seasonality affects Q1 setup: Q1 is typically the lowest revenue quarter (about 20% of FY), particularly as data deliveries are back-half weighted with pharma budget cycles, which may temper near-term growth optics .
  • GAAP losses remain: Q4 GAAP net loss was $(13.0)M; full-year GAAP net loss was $(705.8)M, reflecting substantial stock-based compensation ($547.7M for FY), albeit improving quarterly profitability metrics .

Financial Results

YoY and Sequential Performance vs Estimates

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$147.7 $180.9 $200.7
Gross Profit ($USD Millions)$81.5 $105.8 $122.1
Gross Margin (%)55.0% 58.5% 60.8%
Net Loss per Share (GAAP, $)N/A$(0.46) $(0.08)
Adjusted EBITDA ($USD Millions)$(35.1) $(21.8) $(7.8)
Estimates ComparisonQ4 2024
Revenue vs ConsensusUnavailable – S&P Global data could not be retrieved due to request limits (attempted)
EPS vs ConsensusUnavailable – S&P Global data could not be retrieved due to request limits (attempted)

Note: Wall Street consensus (S&P Global) could not be fetched due to daily limit errors; comparisons to estimates are unavailable.

Segment Breakdown

Segment Revenue ($USD Millions)Q4 2023Q3 2024Q4 2024
Genomics$92.2 $116.4 $120.4
Data & Services$55.5 $64.5 $80.2

KPIs and Margins

KPI / MarginQ4 2023Q3 2024Q4 2024
Net Revenue Retention (%)N/AN/A140%
Total Remaining Contract Value ($USD Millions)N/A>$900 (ended Q3) $940
Genomics Gross Margin (GAAP)45.4% 48.4% 48.4%
Genomics Gross Margin (Non-GAAP)45.4% 49.3% 49.6%
Data & Services Gross Margin (GAAP)71.5% 76.8% 79.5%
Data & Services Gross Margin (Non-GAAP)71.5% 78.3% 80.3%
Cash & Equivalents ($USD Millions)N/A$388.0 cash; $466.3 cash+securities (ending) $340.954 (year-end balance sheet)
Connected Providers (~ count)N/AN/A~3,000
ECG-AF Algorithm Reimbursement ($/algorithm)N/AN/A$138
xT CDx ADLT Rate ($/test)N/AN/A$4,500

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (Consolidated, incl. Ambry)FY 2025~$1.23B (prior management commentary) ~$1.24B Raised
Adjusted EBITDAFY 2025N/A~$5M (≈+$110M YoY improvement) Introduced/Positive
Revenue PhasingQ1 2025N/A~20% of FY revenue in Q1 (seasonality) Clarified
ADLT Migration (xT CDx)Q1 2025 ExitN/A~20% of xT volume on ADLT by Q1-end Operational milestone
Ambry Organic GrowthFY 2025N/AHigh-teens implied growth as 2024 accelerants lap Context

Note: Company does not provide GAAP net loss guidance and cannot reasonably reconcile forecasted Adjusted EBITDA to GAAP net loss given variability in certain items .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/Tech initiatives; AppsLaunched MRD portfolio; ECG-AF FDA clearance; Apps revenue small but growing; reimbursement pathway multiyear Continued adoption; Northwestern ECG-AF collaboration; reimbursement still nascent Olivia AI app launched; $12/month subscription; early stage; potential transformative reach Building portfolio; monetization early
Data licensing & TCVLarge pharma expansions; TCV north of $900M; strong Insights growth (40% YoY) TCV stayed >$900M; back-half weighted deliveries; strong Insights growth (86.6% YoY) TCV $940M and 140% NRR; >$10M delivery shifted to early 2025; visibility robust Healthy but lumpy; visibility intact
Payer/reimbursementADLT for xT CDx at $4,500; ASP tailwinds expected in 2025; in-network progress (Aetna, Humana, Cigna) In-network wins (Blue Cross IL/CA, Avalon) support ASPs; liquid biopsy ~$300 Medicare uplift ADLT national launch; ~20% xT volume on ADLT by Q1-end; ECG-AF reimbursed $138; more in-network deals Positive tailwinds
MRD executionTumor-naïve CRC and tumor-informed assays launched; metered volume pending reimbursement Emphasis on ramp post reimbursement; portfolio breadth Tumor-naïve reimbursement targeted late 2025 via MolDX; portfolio refinement ongoing Progressing; revenue contribution post reimbursement
Ambry acquisition/integrationAgreement announced; Ambry >$300M revenue and >$40M EBITDA; synergistic Complementary call points (genetic counselors vs oncologists); synergies over time Closed Feb 3, 2025; West Coast lab redundancy; 2025 growth high-teens; minimal near-term synergies Closed; integration staged
Seasonality/macroQ1 lower; pharma budgets back-half weighted for data Q4 heavy for data; Q1 lowest % of year Q1 ~20% of FY revenue; back-half data weighting reiterated Consistent pattern
Regulatory/legalGuardant suit not material near-term —FDA changes seen as tailwind; limited impact from staffing Tailwind bias

Management Commentary

  • “Q4 was a fantastic quarter… revenue growth accelerated to 35.8%… gross profit… growing even more rapidly… we expect to be adjusted EBITDA positive and generate about $5 million” — Eric Lefkofsky .
  • “$940 million of total remaining contract value… larger agreements have committed spend and deliver quarterly; smaller agreements are signed and delivered in-year” — Jim Rogers .
  • “We had a fairly large data delivery, north of $10 million… natural timing to early part of this year” — Eric Lefkofsky .
  • “We increased our revenue guidance… upped that to $1.24 billion for 2025” — Eric Lefkofsky .
  • “We’ll end [Q1] with about 20% of our xT volume moving over to ADLT” — Jim Rogers .
  • “Ambry… a West Coast lab… longer-term initiative for redundancy; Ambry growth high teens in 2025 as accelerants lap” — Eric Lefkofsky .

Q&A Highlights

  • Data timing and visibility: >$10M data delivery slipped from Q4 to early 2025; majority of 2025 data revenue under contract; larger subscriptions deliver quarterly .
  • Guidance phasing: Q1 ~20% of FY revenue; ADLT migration to ~20% of xT volume by Q1-end; seasonality consistent with prior years .
  • Ambry trajectory: Implied high-teens 2025 growth as 2024 accelerants (cash collections, competitor shifts) lap; core Tempus ~30% .
  • TCV interpretation: $940M TCV and 140% NRR viewed as healthy buffer; bookings are lumpy; long-term correlation to revenue deliveries .
  • Profitability focus: 2025 Adjusted EBITDA ~$5M; near-term beat would be reinvested in growth; minimal 2025 synergies from Ambry, more in 2026 .

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 revenue and EPS (and prior quarters) but encountered daily request limit errors; therefore, Street consensus comparisons are unavailable at this time. Where estimate comparisons are requested, note that values could not be retrieved due to system limits and are not presented.

Key Takeaways for Investors

  • Revenue acceleration with outsized gross profit expansion reflects mix shift toward high-margin Data & Services; consolidated gross margin rose to 60.8% .
  • 2025 guide raised to ~$1.24B revenue and ~+$5M Adjusted EBITDA, signaling inflection to profitability; near-term margins likely reinvested to sustain durable growth .
  • Strong visibility via $940M TCV and 140% net revenue retention, but bookings and deliveries remain lumpy; one >$10M delivery moved into early 2025 .
  • Reimbursement tailwinds: ADLT for xT CDx ($4,500/test) and ECG-AF algorithm ($138) plus in-network wins should gradually lift ASPs and cash collections through 2025 .
  • Ambry expands hereditary footprint and payer relationships; management expects high-teens growth for Ambry in 2025 with minimal near-term synergies, increasing in 2026 .
  • Seasonality matters: Q4 often heavy data; Q1 ~20% of revenue — model intra-year phasing accordingly .
  • Risk watch: GAAP losses (driven by stock comp), leverage from debt financing, and timing variances in data deliveries; monitor ASP progression and reimbursement milestones .

Appendix: Additional Detail Tables

Sequential Trend (2024 Quarters)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$166.0 $180.9 $200.7
Gross Profit ($USD Millions)$75.5 $105.8 $122.1
Gross Margin (%)45.5% 58.5% 60.8%
Adjusted EBITDA ($USD Millions)$(31.2) $(21.8) $(7.8)

Selected Operating Items (Q4 2024 and FY 2024)

ItemQ4 2024FY 2024
GAAP Net Loss ($USD Millions)$(13.0) $(705.8)
Stock-based Comp + Employer Payroll Taxes ($USD Millions)$32.4 (Q4) $547.7 (FY)
Non-GAAP Net Loss per Share ($)$(0.18) $(1.58)
Loss from Operations ($USD Millions)$(50.7) $(691.1)

Citations:

  • Q4 2024 press release and 8-K (financials, guidance, margins, KPIs):
  • Preliminary Q4 2024 update (CRO softness):
  • Q3 2024 press release and 8-K (segment data, margins, cash):
  • Q2 2024 press release and 8-K (launches, margins):
  • Q4 2024 earnings call transcript (guidance raise, seasonality, ADLT migration, data delivery timing, TCV context, Ambry growth):
  • Q3/Q2 call transcripts (TCV >$900M, Insights growth, in-network payers, MRD ramp):