Tempus AI, Inc.

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 Curtihullo, VP for Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to Tempest's first quarter 2025 conference call. This afternoon, Tempest 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 Tempest are Eric Lifkoski, founder and CEO of Tempest, 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.tempest.com. I would now like to turn the call over to Eric.

Thank you. And thanks for joining us today. Q1 was a record quarter for Tempest 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 Tempest 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. So 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 yesterday. 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. And 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 petabytes 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 is complete, which we expect the first version of the model will be complete in about 9 to 12 months, each party will get a copy, ASEAN 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 it was our first strategic collaboration, we couldn't be more excited to be expanding our relationship in such a significant manner, I think, you know, kind of further validating the value we're providing to lots of biopharma clients. It's 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. And as such, this represents an entirely new category for us. It's also important in that it's 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. And we believe models like this will bring all kinds of insights into clear focus. And 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.