IMG Artificial Intelligence Software Technology

Tempus Reports Fourth Quarter and Full Year 2024 Results

Tempus Reports Fourth Quarter and Full Year 2024 Results

Tempus Communications
Erin Carron
media@tempus.com

Tempus Investor Relations
Elizabeth Krutoholow
Elizabeth.krutoholow@tempus.com

Tempus AI, Inc. (NASDAQ: TEM), a technology company leading the adoption of AI to advance precision medicine and patient care, today reported financial results for the quarter and year ended December 31, 2024.

  • Year-over-year revenue growth accelerated to 35.8% in the fourth quarter of 2024
  • Gross profit growth accelerated to 49.7% in the fourth quarter of 2024, led by Data and services
  • Ended the year with $940 million in Total Remaining Contract Value and 140% net revenue retention
  • Closed the acquisition of Ambry Genetics on February 3, 2025
  • Increases revenue guidance to $1.24 billion for 2024 and expect full year 2025 Adjusted EBITDA of approximately $5 million, an improvement of approximately $110 million over 2024

“Our performance in 2024 reflects the strength of our core businesses, as Genomics continued to show strong volume growth and our Data business delivered record results throughout the year,” said Eric Lefkofsky, Founder and CEO of Tempus. “We believe our investments in AI have positioned us well for the future, as technologies that seemed unimaginable a few short years ago increasingly allow us to make our diagnostics intelligent, helping patients live longer and healthier lives. We remain on track to achieve our key financial milestones, with expected robust revenue growth and positive Adjusted EBITDA in 2025.”

Fourth Quarter Summary Results

  • Quarterly revenue increased 35.8% year-over-year to $200.7 million in the fourth quarter of 2024.
    • Genomics generated $120.4 million in revenue in the fourth quarter of 2024, representing 30.6% year-over-year growth, with unit growth of 22.5% year-over-year.
    • Data and services generated $80.2 million in revenue in the fourth quarter of 2024, representing 44.6% year-over-year growth.
  • Quarterly gross profit increased 49.7% to $122.1 million, led by Data and services.
  • Net loss of ($13.0 million), which included $32.4 million of stock compensation expense and related employer payroll taxes in the fourth quarter of 2024 compared to a net loss of ($50.5 million) in the fourth quarter of 2023 and a net loss of ($75.8 million) in the third quarter of 2024.
  • Adjusted EBITDA improved to ($7.8 million) in the fourth quarter of 2024, compared to ($35.1 million) in the fourth quarter of 2023 and ($21.8 million) in the third quarter of 2024.

Full Year 2024 Summary Results

  • Annual Revenue increased 30.4% year-over-year to $693.4 million in 2024.
    • Genomics generated $451.7 million in revenue in 2024, representing 24.4% year-over-year growth, with unit growth of 23.8% year-over-year.
    • Data and services generated $241.6 million in revenue in 2024, representing 43.2% year-over-year growth.
    • Ended the year with $940 million in remaining Total Contract Value given that our net revenue retention improved to 140%.
  • Annual gross profit increased to $381.1 million in 2024, representing 33.2% growth year-over-year.
  • Net loss of ($705.8 million) in 2024, which included $547.7 million of stock compensation expense and related employer payroll taxes.
  • Adjusted EBITDA improved $49.5 million year-over-year in 2024 to ($104.7 million).

Fourth Quarter 2024 and Recent Operational Highlights

  • Completed the acquisition of Ambry Genetics on February 3, 2025.
  • Announced the national launch of the Company’s FDA-approved, NGS-based in vitro diagnostic device, xT CDx which was granted ADLT status and a reimbursement rate of $4,500 per test.
  • Announced the impact of a decision by the Centers for Medicare and Medicaid Services (CMS) that will allow reimbursement for cardiac dysfunction assessments using the Tempus ECG-AF algorithm, currently paying $138/algorithm.
  • Signed agreements for in-network provider status with Blue Cross Blue Shield of Illinois, Blue Shield of California, and Avalon Healthcare Solutions.
  • Grew our network and are now connected to ~3,000 providers in the U.S.

Fourth Quarter and Full Year 2024 Financial Results

 

 

Three Months Ended
December 31, 2024

 

 

Year Ended
December 31, 2024

 

 

 

(in thousands, except percentages and per share amounts)

 

 

 

(unaudited)

 

GAAP Results

 

 

 

 

 

 

Revenue

 

$

200,680

 

 

$

693,398

 

Year-over-year growth

 

 

35.8

%

 

 

30.4

%

Gross Profit

 

$

122,064

 

 

$

381,113

 

Loss from operations

 

$

(50,700

)

 

$

(691,082

)

Net loss

 

$

(13,014

)

 

$

(705,809

)

Adjusted EBITDA

 

$

(7,752

)

 

$

(104,707

)

Net loss per share attributable to common shareholders, basic and diluted

 

$

(0.08

)

 

$

(6.23

)

Non-GAAP net loss per share

 

$

(0.18

)

 

$

(1.58

)

Financial Guidance and 2025 Outlook

Tempus now expects full year 2025 revenue of approximately $1.24 billion for the consolidated Tempus and Ambry Genetics business, which represents approximately 79% annual growth, and Adjusted EBITDA of $5 million for full year 2025, an improvement of approximately $110 million over 2024.

For additional information on the quarter and full year, including a letter from our CEO and CFO, please visit our investor relations site investors.tempus.com.

Webcast and Conference Call Information

A conference call and webcast will begin today, February 24, 2025 after market close at 4:30 p.m. Eastern Time. Interested parties may access details at:

Conference ID: 9601821
Domestic Dial-in Number: (888)-596-4144
International Dial-in Number: (646)-968-2525
Live Webcast: https://edge.media-server.com/mmc/p/6qbep94p/

The webcast may be accessed on the company’s investor relations website at investors.tempus.com. For those unable to listen to the live webcast, a recording will be made available on the company’s website after the event and will be accessible for one year. Visit the investor relations website to find the company’s latest deck, and commentary on the quarter and year by Eric Lefkofsky, Founder and CEO and Jim Rogers, CFO, which will be discussed on the conference call and webcast.

About Tempus

Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. With one of the world’s largest libraries of multimodal data, and an operating system to make that data accessible and useful, Tempus provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. The goal is for each patient to benefit from the treatment of others who came before by providing physicians with tools that learn as the company gathers more data. For more information, visit tempus.com.

Non-GAAP Financial Measures

In addition to the financial information presented in this release in accordance with accounting principles generally accepted in the United States of America (GAAP), Tempus also presents adjusted non-GAAP financial measures.

Non-GAAP gross profit is defined as GAAP gross profit, excluding stock-based compensation expense and employer payroll tax related to stock-based compensation (collectively, the “stock-based compensation adjustments”). Non-GAAP gross margin is defined as gross profit, excluding the stock-based compensation adjustments, as a percentage of revenue. Non-GAAP operating expenses are calculated as the sum of technology research and development expense, research and development expense, and selling, general and administrative expense, excluding the stock-based compensation adjustments. Non-GAAP net income (loss) is defined as net income (loss), adjusted to exclude (i) losses on equity method investments, (ii) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (iii) the payment of $2.3 million of our Series G-4 convertible preferred stock in connection with the initial public offering (the “G-4 Special Payment”), (iv) amortization of deferred other income from our IP License Agreement with SB Tempus, (v) the settlement of certain historical and potential future disputes, and (vi) acquisition-related expenses. Non-GAAP net income (loss) per share is defined as adjusted net income (loss) divided by weighted average common shares outstanding, basic and diluted.

EBITDA is defined as net income (loss), adjusted to exclude (i) interest income, (ii) interest expense, (iii) depreciation and amortization, and (iv) provision for income taxes. Adjusted EBITDA is defined as net income (loss), adjusted to exclude (i) interest income, (ii) interest expense, (iii) depreciation and amortization, (iv) provision for (benefit from) income taxes, (v) losses on equity method investments, (vi) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (vii) stock-based compensation expense, (viii) employer payroll tax related to stock-based compensation expense, (ix) the G-4 Special Payment, (x) amortization of deferred other income from our IP License Agreement with SB Tempus, (xi) the settlement of certain historical and potential future disputes, and (xii) acquisition related expenses.

Tempus believes these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by institutional investors and the analyst community to help them analyze the health of Tempus’ business. In particular, Adjusted EBITDA is a key measurement used by Tempus management to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Tempus does not provide guidance for net loss, the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA, and similarly cannot provide a reconciliation between Tempus’ forecasted Adjusted EBITDA and net loss without unreasonable effort due to the unavailability of reliable estimates for certain components of net income (loss) and the respective reconciliations. These forecasted items are not within Tempus’ control, may vary greatly between periods, and could significantly impact future financial results.

Other Key Metrics

Total Remaining Contract Value (TCV) 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. Remaining TCV excludes any revenue recognized to date on these contracts or any future adjustments made to the contractual value as a result of amendments or terminations.

Net Revenue Retention compares the annual Insights product revenue generated from all customers that made an Insights purchase in one year to the annual Insights product revenue generated from the same cohort of customers in the subsequent year.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, about Tempus and its industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including, but not limited to, Tempus’ expected financial results for full year 2025; whether investments in AI have positioned Tempus well for the future; and the ability of Tempus’ diagnostics to help patients live longer and healthier lives. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Tempus cautions you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. Tempus has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that it believes may affect Tempus’ business, financial condition, results of operations and prospects. These forward-looking statements are subject to risks and uncertainties related to: the intended use of Tempus’ products and services; Tempus’ financial performance; the ability to attract and retain customers and partners; managing Tempus’ growth and future expenses; competition and new market entrants; compliance with new laws, regulations and executive actions, including any evolving regulations in the artificial intelligence space; the ability to maintain, protect and enhance Tempus’ intellectual property; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures or investments, including Tempus’ ability to realize the expected benefits of the acquisition of Ambry Genetics; the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in the section titled “Risk Factors” in Tempus’ Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on February 24, 2025, as well as in other filings Tempus may make with the SEC in the future. In addition, any forward-looking statements contained in this press release are based on assumptions that Tempus believes to be reasonable as of this date. Tempus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

 

Tempus AI, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

 

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Net revenue

 

 

 

 

 

 

 

 

Genomics

$

451,749

 

 

$

363,022

 

 

$

197,984

 

Data and services

 

241,649

 

 

 

168,800

 

 

 

122,684

 

Total net revenue

$

693,398

 

 

$

531,822

 

 

$

320,668

 

Cost and operating expenses

 

 

 

 

 

 

 

 

Cost of revenues, genomics

 

243,467

 

 

 

189,165

 

 

 

150,255

 

Cost of revenues, data and services

 

68,818

 

 

 

56,482

 

 

 

40,227

 

Technology research and development

 

167,519

 

 

 

95,155

 

 

 

79,093

 

Research and development

 

149,325

 

 

 

90,343

 

 

 

83,158

 

Selling, general and administrative

 

755,351

 

 

 

296,760

 

 

 

233,377

 

Total cost and operating expenses

 

1,384,480

 

 

 

727,905

 

 

 

586,110

 

Loss from operations

$

(691,082

)

 

$

(196,083

)

 

$

(265,442

)

Interest income

 

11,084

 

 

 

7,601

 

 

 

3,032

 

Interest expense

 

(53,653

)

 

 

(46,869

)

 

 

(21,894

)

Other income (expense), net

 

32,336

 

 

 

21,822

 

 

 

(4,846

)

Loss before provision for income taxes

$

(701,315

)

 

$

(213,529

)

 

$

(289,150

)

Provision for income taxes

 

(266

)

 

 

(288

)

 

 

(66

)

Losses from equity method investments

 

(4,228

)

 

 

(301

)

 

 

(595

)

Net Loss

$

(705,809

)

 

$

(214,118

)

 

$

(289,811

)

Accretion of convertible preferred stock to redemption value

 

—

 

 

 

(4,338

)

 

 

(301

)

Dividends on Series A, B, B-1, B-2, C, D, E, F, G, G-3, and G-4 preferred shares

 

(39,347

)

 

 

(44,497

)

 

 

(40,975

)

Cumulative undeclared dividends on Series C preferred shares

 

(1,174

)

 

 

(3,011

)

 

 

(2,841

)

Net loss attributable to common shareholders, basic and diluted

 

(746,330

)

 

 

(265,964

)

 

 

(333,928

)

Net loss per share attributable to common shareholders, basic and diluted

$

(6.23

)

 

$

(4.20

)

 

$

(5.30

)

Weighted-average shares outstanding used to compute net loss per share, basic and diluted

 

119,849

 

 

 

63,306

 

 

 

63,032

 

Comprehensive Loss, net of tax

 

 

 

 

 

 

 

 

Net loss

$

(705,809

)

 

$

(214,118

)

 

$

(289,811

)

Foreign currency translation adjustment

 

89

 

 

 

(13

)

 

 

29

 

Comprehensive loss

$

(705,720

)

 

$

(214,131

)

 

$

(289,782

)

 

Tempus AI, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

 

 

December 31,
2024

 

 

December 31,
2023

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

340,954

 

 

$

165,767

 

Accounts receivable, net of allowances of $1,141 and $1,115 at December 31, 2024 and December 31, 2023, respectively

 

 

154,819

 

 

 

94,462

 

Inventory

 

 

38,386

 

 

 

28,845

 

Warrant asset

 

 

—

 

 

 

5,070

 

Prepaid expenses and other current assets

 

 

26,135

 

 

 

17,295

 

Marketable equity securities

 

 

107,309

 

 

 

31,807

 

Deferred offering costs

 

 

—

 

 

 

7,085

 

Total current assets

 

$

667,603

 

 

$

350,331

 

Property and equipment, net

 

 

58,056

 

 

 

61,681

 

Goodwill

 

 

73,343

 

 

 

73,354

 

Warrant asset, less current portion

 

 

—

 

 

 

4,930

 

Intangible assets, net

 

 

11,716

 

 

 

21,916

 

Investments and other assets

 

 

8,305

 

 

 

8,971

 

Investment in joint venture

 

 

91,450

 

 

 

—

 

Warrant contract asset, less current portion

 

 

—

 

 

 

21,499

 

Operating lease right-of-use assets

 

 

14,762

 

 

 

20,530

 

Restricted cash

 

 

881

 

 

 

840

 

Total Assets

 

$

926,116

 

 

$

564,052

 

 

 

 

 

 

 

 

Liabilities, Convertible redeemable preferred stock, and Stockholders' equity (deficit)

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

 

53,804

 

 

 

54,421

 

Accrued expenses

 

 

130,407

 

 

 

82,517

 

Deferred revenue

 

 

75,981

 

 

 

64,860

 

Deferred other income

 

 

15,955

 

 

 

—

 

Other current liabilities

 

 

6,964

 

 

 

8,213

 

Operating lease liabilities

 

 

6,459

 

 

 

6,437

 

Accrued data licensing fees

 

 

1,500

 

 

 

6,382

 

Accrued dividends

 

 

—

 

 

 

9,797

 

Total current liabilities

 

$

291,070

 

 

$

232,627

 

Operating lease liabilities, less current portion

 

 

26,199

 

 

 

32,040

 

Convertible promissory note

 

 

168,192

 

 

 

193,124

 

Warrant liability

 

 

—

 

 

 

34,500

 

Other long-term liabilities

 

 

15,980

 

 

 

19,751

 

Interest payable

 

 

70,450

 

 

 

55,321

 

Long-term debt, net

 

 

267,244

 

 

 

256,541

 

Deferred other income, less current portion

 

 

23,932

 

 

 

—

 

Deferred revenue, less current portion

 

 

6,710

 

 

 

16,768

 

Total Liabilities

 

$

869,777

 

 

$

840,672

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Convertible redeemable preferred stock, $0.0001 par value, no and 69,803,765 shares authorized at December 31, 2024 and December 31, 2023, respectively; no and 63,525,953 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $0 and $1,130,429 at December 31, 2024 and December 31, 2023, respectively

 

 

—

 

 

 

1,105,543

 

 

 

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

 

 

 

Class A Voting Common Stock, $0.0001 par value, 1,000,000,000 and 200,228,024 shares authorized at December 31, 2024 and December 31, 2023, respectively; 157,076,972 and 58,367,961 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

 

 

16

 

 

$

6

 

Class B Voting Common Stock, $0.0001 par value, 5,500,000 and 5,374,899 shares authorized at December 31, 2024 and December 31, 2023, respectively; 5,043,789 and no shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

 

 

1

 

 

 

—

 

Non-voting Common Stock, $0.0001 par value, no and 66,946,627 shares authorized at December 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding at December 31, 2024, and 5,205,802 shares issued and 5,060,336 shares outstanding at December 31, 2023

 

 

—

 

 

 

0

 

Treasury Stock, 145,466 shares at December 31, 2024 and December 31, 2023, at cost

 

 

(3,602

)

 

 

(3,602

)

Additional Paid-In Capital

 

 

2,210,664

 

 

 

18,345

 

Accumulated Other Comprehensive Income

 

 

94

 

 

 

5

 

Accumulated deficit

 

 

(2,150,834

)

 

 

(1,396,917

)

Total Stockholders' equity (deficit)

 

$

56,339

 

 

$

(1,382,163

)

Total Liabilities, Convertible redeemable preferred stock,
and Stockholders' equity (deficit)

 

$

926,116

 

 

$

564,052

 

 

Tempus AI, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except per share amounts)

 

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

$

(705,809

)

 

$

(214,118

)

 

$

(289,811

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Change in fair value of warrant liability

$

42,400

 

 

$

(8,000

)

 

$

4,700

 

Gain on warrant termination

 

(39,100

)

 

 

—

 

 

 

—

 

Reversal of warrant contract asset amortization

 

(16,301

)

 

 

—

 

 

 

—

 

Gain on warrant exercise

 

(173

)

 

 

—

 

 

 

—

 

Stock-based compensation

 

534,138

 

 

 

—

 

 

 

—

 

Amortization of warrant contract asset

 

4,843

 

 

 

5,221

 

 

 

4,720

 

Change in fair value of warrant asset

 

(18,302

)

 

 

(4,100

)

 

 

—

 

Gain on marketable equity securities

 

(12,110

)

 

 

(9,807

)

 

 

—

 

Losses from equity method investments

 

4,228

 

 

 

301

 

 

 

595

 

Amortization of original issue discount

 

1,382

 

 

 

1,117

 

 

 

238

 

Amortization of deferred financing fees

 

510

 

 

 

510

 

 

 

139

 

Change in fair value of contingent consideration

 

72

 

 

 

(400

)

 

 

(3,701

)

Depreciation and amortization

 

37,245

 

 

 

33,049

 

 

 

30,029

 

Provision for bad debt expense

 

680

 

 

 

1,646

 

 

 

3,867

 

Provision for obsolete inventory

 

—

 

 

 

—

 

 

 

1,938

 

Amortization of finance right-of-use lease assets

 

—

 

 

 

283

 

 

 

381

 

Non-cash operating lease costs

 

6,047

 

 

 

6,760

 

 

 

6,427

 

Minimum accretion expense

 

197

 

 

 

90

 

 

 

455

 

Impairment of intangible assets

 

—

 

 

 

7,359

 

 

 

—

 

PIK interest added to principal

 

8,811

 

 

 

3,587

 

 

 

—

 

Change in assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

(61,037

)

 

 

(7,347

)

 

 

(8,203

)

Inventory

 

(9,541

)

 

 

(6,563

)

 

 

(1,312

)

Prepaid expenses and other current assets

 

(13,683

)

 

 

(6,474

)

 

 

(1,094

)

Investments and other assets

 

(751

)

 

 

(4,209

)

 

 

(2,296

)

Accounts payable

 

(23,852

)

 

 

(23,363

)

 

 

(7,915

)

Deferred revenue

 

(20,942

)

 

 

(26,412

)

 

 

67,626

 

Deferred other income

 

39,887

 

 

 

—

 

 

 

—

 

Accrued data licensing fees

 

(5,000

)

 

 

(9,121

)

 

 

(6,746

)

Accrued expenses & other

 

50,540

 

 

 

38,577

 

 

 

22,803

 

Interest payable

 

15,129

 

 

 

15,836

 

 

 

16,395

 

Operating lease liabilities

 

(8,553

)

 

 

(8,761

)

 

 

(7,439

)

Net cash used in operating activities

$

(189,045

)

 

$

(214,339

)

 

$

(168,204

)

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

$

(22,121

)

 

$

(34,608

)

 

$

(18,377

)

Proceeds from sale of marketable equity securities

 

23,098

 

 

 

—

 

 

 

—

 

Purchases of marketable equity securities

 

(36,183

)

 

 

—

 

 

 

—

 

Business combinations, net of cash acquired (Note 3)

 

—

 

 

 

(5,705

)

 

 

(39,562

)

Investment in joint venture

 

(95,186

)

 

 

—

 

 

 

—

 

Net cash used in investing activities

$

(130,392

)

 

$

(40,313

)

 

$

(57,939

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions

$

381,951

 

 

$

—

 

 

$

—

 

Tax withholding related to net share settlement of restricted stock units

 

(69,918

)

 

 

—

 

 

 

—

 

Issuance of Series G-3 Preferred Stock, net of offering costs

 

—

 

 

 

—

 

 

 

92,199

 

Issuance of Series G-4 Preferred Stock, net of offering costs

 

—

 

 

 

44,885

 

 

 

—

 

Issuance of Series G-5 Preferred Stock

 

199,750

 

 

 

—

 

 

 

—

 

Principal payments on finance lease liabilities

 

—

 

 

 

(288

)

 

 

(375

)

Purchase of treasury stock

 

—

 

 

 

(3,602

)

 

 

—

 

Payment of deferred offering costs

 

(8,766

)

 

 

(698

)

 

 

(2,883

)

Payment of deferred financing fees

 

—

 

 

 

—

 

 

 

(2,550

)

Dividends paid

 

(5,625

)

 

 

(5,625

)

 

 

(5,625

)

Proceeds from long-term debt, net of original issue discount

 

—

 

 

 

82,875

 

 

 

170,625

 

Payment of indemnity holdback related to acquisition

 

(813

)

 

 

—

 

 

 

—

 

G-4 Special Payment

 

(2,250

)

 

 

—

 

 

 

—

 

Net cash provided by financing activities

$

494,329

 

 

$

117,547

 

 

$

251,391

 

Effect of foreign exchange rates on cash

$

336

 

 

$

(19

)

 

$

17

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in Cash, Cash Equivalents and Restricted Cash

$

175,228

 

 

$

(137,124

)

 

$

25,265

 

Cash, cash equivalents and restricted cash, beginning of period

 

166,607

 

 

 

303,731

 

 

 

278,466

 

Cash, cash equivalents and restricted cash, end of period

$

341,835

 

 

$

166,607

 

 

$

303,731

 

 

 

 

 

 

 

 

 

 

Cash, Cash Equivalents and Restricted Cash are Comprised of:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

340,954

 

 

$

165,767

 

 

$

302,938

 

Restricted cash

 

881

 

 

 

840

 

 

 

793

 

Total cash, cash equivalents and restricted cash

$

341,835

 

 

$

166,607

 

 

$

303,731

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

Cash paid during the year for interest

$

28,045

 

 

$

16,913

 

 

$

4,664

 

Cash paid for income taxes

$

206

 

 

$

161

 

 

$

6

 

Marketable equity securities received on accounts receivable

$

22,000

 

 

$

22,000

 

 

$

—

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

 

 

 

Dividends payable

$

5,487

 

 

$

12,535

 

 

$

5,625

 

Purchases of property and equipment, accrued but not paid

$

4,292

 

 

$

6,137

 

 

$

2,408

 

Deferred offering costs, accrued but not yet paid

$

—

 

 

$

3,504

 

 

$

2,391

 

Redemption of convertible promissory note

$

24,932

 

 

$

27,970

 

 

$

17,142

 

Non-voting common stock issued in connection with business combinations

$

344

 

 

$

9,209

 

 

$

4,947

 

Non-voting common stock issued in connection with contingent consideration

$

—

 

 

$

—

 

 

$

4,304

 

Accretion of convertible preferred stock to redemption value

$

—

 

 

$

4,338

 

 

$

301

 

Operating lease liabilities arising from obtaining right-of-use assets

$

1,997

 

 

$

1,097

 

 

$

41,815

 

Finance lease liabilities arising from obtaining right-of-use-assets

$

—

 

 

$

—

 

 

$

664

 

Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering

$

1,348,809

 

 

$

—

 

 

$

—

 

Taxes related to net share settlement of restricted stock units not yet paid

$

20

 

 

$

—

 

 

$

—

 

Reclassification of deferred offering costs to additional paid-in capital upon initial public offering

$

12,347

 

 

$

—

 

 

$

—

 

Issuance of Series G-3 Preferred Stock

$

3,809

 

 

$

2,738

 

 

$

—

 

Issuance of warrant

$

—

 

 

$

4,223

 

 

$

—

 

Issuance of Series G-4 Preferred Stock

$

611

 

 

$

—

 

 

$

—

 

Issuance of common stock in connection with contingent consideration

$

847

 

 

$

—

 

 

$

—

 

 

Tempus AI, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands, except percentages and per share amounts)

 

Genomics Gross Profit & Gross Margin

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Genomics revenue

 

$

120,434

 

 

$

92,225

 

 

$

451,749

 

 

$

363,022

 

Cost of revenues, genomics

 

 

62,182

 

 

 

50,384

 

 

 

243,467

 

 

 

189,165

 

Gross profit, genomics

 

$

58,252

 

 

$

41,841

 

 

$

208,282

 

 

$

173,857

 

Stock-based compensation expense

 

 

1,215

 

 

 

—

 

 

 

13,625

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

293

 

 

 

—

 

 

 

455

 

 

 

—

 

Non-GAAP gross profit, genomics

 

$

59,760

 

 

$

41,841

 

 

$

222,362

 

 

$

173,857

 

Genomics gross margin

 

 

48.4

%

 

 

45.4

%

 

 

46.1

%

 

 

47.9

%

Stock-based compensation expense

 

 

1.0

%

 

 

0.0

%

 

 

3.0

%

 

 

0.0

%

Employer payroll tax related to stock-based compensation

 

 

0.2

%

 

 

0.0

%

 

 

0.1

%

 

 

0.0

%

Non-GAAP gross margin, genomics

 

 

49.6

%

 

 

45.4

%

 

 

49.2

%

 

 

47.9

%

Data and Services Gross Profit & Gross Margin

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Data and services revenue

 

$

80,246

 

 

$

55,499

 

 

$

241,649

 

 

$

168,800

 

Cost of revenues, data and services

 

 

16,434

 

 

 

15,792

 

 

 

68,818

 

 

 

56,482

 

Gross profit, data and services

 

$

63,812

 

 

$

39,707

 

 

$

172,831

 

 

$

112,318

 

Stock-based compensation expense

 

 

385

 

 

 

—

 

 

 

8,530

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

202

 

 

 

—

 

 

 

364

 

 

 

—

 

Non-GAAP gross profit, data and services

 

$

64,399

 

 

$

39,707

 

 

$

181,725

 

 

$

112,318

 

Gross margin, data and services

 

 

79.5

%

 

 

71.5

%

 

 

71.5

%

 

 

66.5

%

Stock-based compensation expense

 

 

0.5

%

 

 

0.0

%

 

 

3.5

%

 

 

0.0

%

Employer payroll tax related to stock-based compensation

 

 

0.3

%

 

 

0.0

%

 

 

0.2

%

 

 

0.0

%

Non-GAAP gross margin, data and services

 

 

80.3

%

 

 

71.5

%

 

 

75.2

%

 

 

66.5

%

Total Gross Profit & Gross Margin

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net revenue

 

$

200,680

 

 

$

147,724

 

 

$

693,398

 

 

$

531,822

 

Cost of revenues

 

 

78,616

 

 

 

66,176

 

 

 

312,285

 

 

 

245,647

 

Gross profit

 

$

122,064

 

 

$

81,548

 

 

$

381,113

 

 

$

286,175

 

Stock-based compensation expense

 

 

1,600

 

 

 

—

 

 

 

22,155

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

495

 

 

 

—

 

 

 

819

 

 

 

—

 

Non-GAAP gross profit

 

$

124,159

 

 

$

81,548

 

 

$

404,087

 

 

$

286,175

 

Gross margin

 

 

60.8

%

 

 

55.2

%

 

 

55.0

%

 

 

53.8

%

Stock-based compensation expense

 

 

0.8

%

 

 

0.0

%

 

 

3.2

%

 

 

0.0

%

Employer payroll tax related to stock-based compensation

 

 

0.2

%

 

 

0.0

%

 

 

0.1

%

 

 

0.0

%

Non-GAAP gross margin

 

 

61.9

%

 

 

55.2

%

 

 

58.3

%

 

 

53.8

%

Operating Expenses

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Technology research and development

 

$

31,864

 

 

$

24,670

 

 

$

167,519

 

 

$

95,155

 

Stock-based compensation expense

 

 

4,110

 

 

 

—

 

 

 

58,473

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

1,306

 

 

 

—

 

 

 

2,747

 

 

 

—

 

Non-GAAP technology research and development

 

$

26,448

 

 

$

24,670

 

 

$

106,299

 

 

$

95,155

 

Research and development

 

$

29,612

 

 

$

24,075

 

 

$

149,325

 

 

$

90,343

 

Stock-based compensation expense

 

 

2,851

 

 

 

—

 

 

 

47,638

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

756

 

 

 

—

 

 

 

1,566

 

 

 

—

 

Non-GAAP research and development

 

$

26,005

 

 

$

24,075

 

 

$

100,121

 

 

$

90,343

 

Selling, general and administrative

 

$

111,288

 

 

$

85,098

 

 

$

755,351

 

 

$

296,760

 

Stock-based compensation expense

 

 

16,226

 

 

 

—

 

 

 

405,872

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

5,023

 

 

 

—

 

 

 

8,411

 

 

 

—

 

Non-GAAP selling, general and administrative

 

$

90,039

 

 

$

85,098

 

 

$

341,068

 

 

$

296,760

 

Operating expenses

 

$

172,764

 

 

$

133,843

 

 

$

1,072,195

 

 

$

482,258

 

Stock-based compensation expense

 

 

23,187

 

 

 

—

 

 

 

511,983

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

7,085

 

 

 

—

 

 

 

12,724

 

 

 

—

 

Non-GAAP operating expenses

 

$

142,492

 

 

$

133,843

 

 

$

547,488

 

 

$

482,258

 

Earnings per Share

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

 

2024

 

2024

Net loss

 

$

(13,014

)

 

$

(705,809

)

Fair value changes(1)

 

 

(47,753

)

 

 

(27,868

)

Stock-based compensation expense

 

 

24,787

 

 

 

534,138

 

Employer payroll tax related to stock-based compensation

 

 

7,580

 

 

 

13,543

 

G-4 Special Payment

 

 

—

 

 

 

2,250

 

Amortization of technology license

 

 

(3,988

)

 

 

(7,977

)

Acquisition related expenses(2)

 

 

2,708

 

 

 

2,708

 

Non-GAAP net loss

 

$

(29,680

)

 

$

(189,015

)

Non-GAAP net loss per share

 

$

(0.18

)

 

$

(1.58

)

Weighted average common shares outstanding, basic and diluted

 

 

166,398

 

 

 

119,849

 

(1)

Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities.?

(2)

Acquisition related expenses consist of legal and diligence costs incurred for the acquisition of Ambry.

Adjusted EBITDA

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net loss

 

$

(13,014

)

 

$

(50,483

)

 

$

(705,809

)

 

$

(214,118

)

Interest income

 

 

(3,546

)

 

 

(1,737

)

 

 

(11,084

)

 

 

(7,601

)

Interest expense

 

 

13,359

 

 

 

13,624

 

 

 

53,653

 

 

 

46,869

 

Depreciation

 

 

6,884

 

 

 

5,621

 

 

 

26,356

 

 

 

21,279

 

Amortization

 

 

2,573

 

 

 

2,919

 

 

 

10,889

 

 

 

11,770

 

Provision for income taxes

 

 

122

 

 

 

214

 

 

 

266

 

 

 

288

 

EBITDA

 

$

6,378

 

 

$

(29,842

)

 

$

(625,729

)

 

$

(141,513

)

Losses on equity method investments

 

 

2,536

 

 

 

—

 

 

 

4,228

 

 

 

301

 

Fair value changes(1)

 

 

(47,753

)

 

 

(14,579

)

 

 

(27,868

)

 

 

(22,307

)

Stock-based compensation expense

 

 

24,787

 

 

 

—

 

 

 

534,138

 

 

 

—

 

Employer payroll tax related to stock-based compensation

 

 

7,580

 

 

 

—

 

 

 

13,543

 

 

 

—

 

G-4 Special Payment

 

 

—

 

 

 

—

 

 

 

2,250

 

 

 

—

 

Amortization of technology license

 

 

(3,988

)

 

 

—

 

 

 

(7,977

)

 

 

—

 

Settlement costs(2)

 

 

—

 

 

 

8,625

 

 

 

—

 

 

 

8,625

 

Acquisition related expenses(3)

 

 

2,708

 

 

 

672

 

 

 

2,708

 

 

 

672

 

Adjusted EBITDA

 

$

(7,752

)

 

$

(35,124

)

 

$

(104,707

)

 

$

(154,222

)

(1)

Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities.?

(2)

Settlement costs for the year ended December 31, 2023 include $0.2 million paid to settle a 2019 payment dispute and $8.5 million in costs accrued related to potential future settlements.

(3)

Acquisition related expenses consist of legal and diligence costs incurred for the acquisition of Ambry during the year ended December 31, 2024, and for the acquisitions of Mpirik, Inc. and SEngine Precision Medicine LLC during the year ended December 31, 2023.