Tempus AI (TEM) Q2 2024 earnings summary

Executive summary

• Q2 2024 marked the first earnings call as a public company, with revenue up 25% year-over-year to $166.0 million, driven by strong growth in both Genomics and Data & Services segments.

• Genomics business achieved 22% year-over-year growth, with all test categories performing in line with historical trends.

• Net loss for Q2 2024 was $552.2 million, primarily due to $488.3 million in IPO-triggered stock-based compensation.

• Adjusted EBITDA improved by $12.7 million quarter-over-quarter to $(31.2) million.

• Completed IPO in June 2024, raising $382.0 million in net proceeds and converting all preferred stock to common stock.

Financial highlights

• Q2 2024 revenue reached $166.0 million, with Genomics revenue at $112.3 million (up 22%) and Data & Services revenue at $53.6 million (up 32%).

• Non-GAAP Genomics gross margin was 49.4% and Data & Services gross margin was 72.4%; GAAP gross margin declined to 45.5% due to IPO-related stock compensation.

• Net loss per share was $(6.86) for Q2 2024, compared to $(1.07) in Q2 2023.

• Cash, cash equivalents, and restricted cash totaled $479.7 million at quarter end.

• Weighted average shares outstanding increased to 82.3 million from 63.3 million year-over-year.

Outlook and guidance

• Full-year 2024 revenue guidance is approximately $700 million, representing about 32% annual growth.

• Adjusted EBITDA for 2024 projected at approximately $(105 million), a $50 million improvement over 2023.

• Company anticipates ongoing operating losses in the near term as it invests in growth and innovation.

• Current cash and equivalents are expected to fund operations for more than twelve months.

• Expectation to maintain 25%-30% unit growth in genomics, with ASP tailwinds anticipated in 2025 as more volume migrates to FDA-approved assays.