NEW YORK – Despite missing the consensus Wall Street revenue estimate, Tempus AI saw its main businesses "firing on all cylinders" in Q4 2024 as revenues rose 36 percent year over year, the company said on Monday.
The Chicago-based firm reported after the close of the market that for the quarter ended Dec. 31, 2024, its revenues rose to $200.7 million from $147.7 million in Q4 2023, missing analysts' average estimate of $202.8 million. The company's genomics business generated $120.4 million in revenue, up 31 percent from $92.2 million in Q4 2023, and the data and services business generated $80.2 million in revenue, an increase of 45 percent from $55.5 million in the year-ago quarter.
According to a letter to investors from Tempus CEO Eric Lefkofsky and CFO Jim Rogers, the company ran approximately 72,500 next-generation sequencing-based tests in Q4 2024, up from 59,200 in Q4 2023. Unit growth in the genomics business picked up through the last half of the year "as our sales force found its 'sea legs,' which we believe sets us up well for the coming year," they wrote.
They added that the business saw consistent growth in solid tumor profiling and liquid biopsies, as well as "even more pronounced growth" in the hereditary screening and minimal residual disease businesses.
On a conference call to discuss the firm's financial results, Lefkofsky said that the company's "two main businesses, genomics and data, are really firing on all cylinders in a period of strength."
Rogers noted on the call that Tempus' xT test received updated pricing from the US Centers for Medicare and Medicaid Services as a result of the advanced diagnostic laboratory tests (ADLT) process. The test is now priced at $4,500 per assay, up from $2,989 per test. Tempus has begun migrating its volume to the ADLT version of xT, but Rogers said that it will take most of 2025 for the vast majority of the migration to get done.
Lefkofsky added that Tempus has submitted its xM assay for minimal residual disease to CMS's Molecular Diagnostics Services Program, or MolDx, and anticipates receiving coverage and reimbursement at some point in late 2025. It also plans to expand the xM assay to other cancer types beyond colorectal cancer and is "consistently refining" the assay to improve sensitivity. Once the assay receives reimbursement, Tempus will begin ramping up volumes "at much greater scale," he said.
In Q4 2024, Tempus saw a net loss of $13.0 million, or $.08 per share, compared to a net loss of $50.5 million in Q4 2023. Adjusted loss per share for the recently completed quarter was $.18, coming in slightly below the consensus Wall Street estimate of a loss of $.15 per share.
For full-year 2024, revenues rose 30 percent to $693.4 million from $531.8 million in 2023 and missed the analysts' average estimate of $695.5 million. Genomics revenues were up 24 percent to $451.7 million from $363.0 million in 2023, while data and services revenues rose 43 percent to $241.6 million from $168.8 million in 2023.
Net loss for the year was $705.8 million, or $6.23 per share, compared to a net loss of $214.1 million, or $4.20 per share, in 2023. Adjusted loss per share was $1.58, beating the analysts' average estimate of a loss of $1.78 per share.
Earlier this month, Tempus closed its $600 million acquisition of Ambry Genetics, and in their letter, Lefkofsky and Rogers noted that Ambry Genetics' full-year 2024 revenues totaled $315 million, up 30 percent from 2023. Ambry benefited from improved reimbursement and volume tailwinds related to some of its competitors, they added. However, Lefkofsky said on the conference call that Tempus expects Ambry's growth rate to be lower in 2025 unless there are "more accelerants that come their way."
He also noted that over time Tempus will move its somatic and comprehensive genomic profiling tests to Ambry's laboratory and will bring some of Ambry's inherited risk assays into Tempus' labs.
Tempus ended the year with $940 million in remaining total contract value, which is equal to the total potential value of signed contracts and assumes the exercise of all contract options, all discretionary opt-ins, and no early termination. It also ended the year with $341.0 million in cash and cash equivalents and $107.3 million in marketable equitable securities.
The firm raised its full-year 2025 revenue to approximately $1.24 billion for the combined Tempus and Ambry Genetics business, which represents approximately 79 percent annual growth. Genomics revenue and unit growth, excluding Ambry Genetics, is expected to be in the 20 percent to 30 percent range, Lefkofsky and Rogers said in their letter. Ambry's growth is expected to be in the high-teens percent range, while Tempus' core growth is expected to be closer to 30 percent, Lefkofsky added on the conference call.
Tempus is also expected to reach adjusted EBITDA positivity in 2025. Lefkofsky said that the firm plans to invest more in long-term growth and make investments back into the business. He added that the firm is not looking to make any more big deals but may look for smaller acquisitions on the data and artificial intelligence side of the business.
"Nothing big is on the horizon," he said.
Rogers said on the conference call that Q1 2025 will likely have the lowest revenue of 2025, and the firm anticipates reporting about 20 percent of its full-year 2025 revenues in Q1.