Tempus AI (TEM) Q3 2024 earnings summary

Executive summary

• Revenue grew 33% year-over-year to $180.9 million in Q3 2024, driven by strong genomics and data/services performance.

• Net loss was $(75.8) million, reflecting higher operating expenses and IPO-related stock compensation.

• Adjusted EBITDA improved to $(21.8) million from $(36.2) million in Q3 2023, with sequential improvement.

• Announced acquisition of Ambry Genetics for $600 million ($375 million cash, $225 million equity), expected to close in Q1 2025 and expand testing capabilities.

• Completed IPO in June 2024, raising $382 million in net proceeds and converting all preferred stock to common stock.

Financial highlights

• Q3 2024 revenue: $180.9 million (+33% YoY); Genomics $116.4 million (+20% YoY), Data and services $64.5 million (+64% YoY).

• Net loss: $(75.8) million in Q3 2024 vs. $(53.4) million in Q3 2023; Adjusted EBITDA: $(21.8) million vs. $(36.2) million.

• Genomics gross margin: 48.4% (down from 51.9%); Data & Services gross margin: 76.8% (up from 60.5%).

• Cash, cash equivalents, and marketable securities: $466.3 million at quarter-end.

• Data licensing backlog remains above $900 million, providing strong forward visibility.

Outlook and guidance

• Full-year 2024 revenue guidance of ~$700 million, representing ~32% annual growth.

• Full-year 2024 adjusted EBITDA guidance: ~$(105) million, a $50 million improvement over 2023.

• Combined company guidance for 2025 is for 23%-25% revenue growth and sustained profitability.

• Ambry Genetics expected to generate $300 million in 2024 revenue and over $40 million in EBITDA.

• Sufficient liquidity to fund operations for more than twelve months; may seek additional capital for growth.