NEW YORK – Tempus AI on Tuesday announced that its Q1 2025 revenues rose 75 percent year over year.
Chicago-based Tempus reported revenues of $255.7 million for the quarter ended March 31, up from $145.8 million in Q1 2024 and beating the Wall Street consensus estimate of $248.1 million.
In a letter posted to the firm's website, Tempus CEO Eric Lefkofsky and CFO Jim Rogers wrote that the first quarter revenues and gross profit were "above expectation."
Genomics revenues increased 89 percent to $193.8 million in Q1 2025 from $102.6 million in Q1 2024. Oncology testing revenues, which make up the legacy Tempus business, totaled $119.0 million, up 31 percent year over year, with volume growth of approximately 20 percent. Tempus ran approximately 75,000 next-generation sequencing-based tests in the oncology testing segment during the quarter, and clinical oncology revenue grew 31 percent from a year ago due to improvements in the average selling price of the company's tests.
Average selling price for the firm's oncology tests increased about $60 per test, Rogers said on a conference call to discuss the company's financial results, largely due to Tempus migrating its xT solid tumor profiling assay volumes to the US Food and Drug Administration-approved version of the test, which is reimbursed at a higher rate than the laboratory developed test version. He added that Tempus will continue to migrate xT volumes to the FDA-approved test over the course of the year.
The company saw growth across the entire oncology testing portfolio, but Rogers noted that the company is still metering volumes of its xM minimal residual disease assay because it has not yet received reimbursement from the US Centers for Medicare and Medicaid Services so Tempus is continuing to bear the cost of running that test.
Lefkofksy added that demand for xM has been "quite strong" and that he expects volumes for the test will be even stronger once it receives reimbursement.
Hereditary testing, which is comprised of the Ambry Genetics business acquired by Tempus in February, contributed $63.5 million in revenues with 23 percent unit growth. The company ran approximately 78,000 tests in the last two months of Q1 2025 after the acquisition. Lefkofsky said on the call that in the long term he expects the Ambry business to grow at a high rate, noting that the business is performing well and "firing on all cylinders, and we see no sign of that slowing down."
Data and services revenue rose 43 percent to $61.9 million from $43.3 million in the year-ago quarter, led by the firm's Insights data licensing business, which grew 58 percent compared to Q1 2024. Lefkofsky also touted the three-year, $200 million deal with AstraZeneca and Pathos AI announced last month that will bring Tempus' remaining contract value to more than $1 billion. The companies will use Tempus' data to build a multimodal oncology foundational model that can be used for drug discovery and diagnostic and data products. The first version of the model is expected to be completed in the next year and will be shared among all three companies.
The nonexclusive agreement has sparked interest among other pharmaceutical companies that Tempus works with and may lead to additional opportunities to build foundational models with other firms, he said. This "represents an entirely new category for us," Lefkofsky added.
The firm saw a net loss of $68.0 million, or $.40 per share, compared to a loss of $64.7 million, or $1.47 per share, in the prior-year quarter. Adjusted net loss per share was $.24 and beat the consensus Wall Street estimate of $.27 per share.
Tempus ended the quarter with cash and cash equivalents of $151.6 million and $67.2 million in marketable equity securities.
Lefkofksy noted that the firm is continuing to invest in its business and doesn't want to miss out on the opportunity to bring artificial intelligence further into healthcare, which he said "could be one of the biggest technology opportunities of all time." The company is running multiple studies in different disease areas and is "constantly investing" in data to be able to bring artificial intelligence to diagnostics at scale.
"We're fortunate that the landscape in front of us is open," he said, but the company is making sure "that we're investing appropriately."
The company increased its full-year 2025 revenue guidance to $1.25 billion for the consolidated Tempus and Ambry Genetics business, which would mark an increase of 80 percent compared to 2024.