Tempus AI (TEM) Piper Sandler 37th Annual Healthcare Conference summary

Profitability and financial outlook

• Achieved first positive adjusted EBITDA in Q3 and plan to maintain profitability, reinvesting two-thirds of incremental growth profit for the next three years, then shifting to one-third reinvestment after that period.

• Expect 25% annual top-line growth over the next three years, balancing growth and profitability.

• Margin expansion in genomics will come from higher ASPs and migration to ADLT status, with stable data margins in the mid-70s; AI applications could drive higher margins long term.

• Most OpEx investment will focus on R&D and technology, with limited sales force expansion.

• M&A remains a strategic option, especially in data and AI, but will be evaluated within a profitability framework.

Data and software business differentiation

• Built a large, de-identified clinical and molecular database from over 5,000 institutions and 45 million patient records, licensed to major biopharma clients.

• Data business operates on multi-year subscriptions, providing raw molecular and longitudinal clinical data, differentiating from other CGP players.

• Integration of Ambry's hereditary data will expand longitudinal insights and rare disease offerings, with full integration as a multi-year effort.

• Data and genomics businesses are interconnected, supporting both patient care and drug development.

Product and market expansion

• xT CDx, a solid tumor DNA test, received FDA approval and ADLT status, with plans to migrate most testing volume to this version by end of 2026.

• Launching new products in genomics, including xF (liquid biopsy) and xM (tumor naive MRD), and expanding rare disease testing through Ambry.

• Commercializing Personalis' tumor-informed assay and offering both tumor-informed and tumor-naive MRD tests to meet diverse physician preferences.

• Developing and marketing algorithmic diagnostics (e.g., ECG, Pixel), with long-term expectations for reimbursement and significant business impact.