Tempus AI, Inc. (NASDAQ: TEM), a technology company at the forefront of using AI to advance precision medicine and patient care, today reported its financial results for the third quarter of 2024. The company also announced it has reached an agreement to acquire Ambry Genetics, a leader in genetic testing focused on improving health by understanding the connection between genetics and disease.
Tempus AI, Inc. (NASDAQ: TEM), a leader in AI-driven precision medicine, today reported its financial results for the third quarter of 2024 and announced it has reached an agreement to acquire Ambry Genetics, a leading provider of genetic testing.
Key Financial Highlights:
- Revenue: $180.9 million for Q3 2024, up 33.0% year-over-year.
- Data and Services Revenue: Increased by 64.4% year-over-year, reflecting strong growth in insights and data licensing.
- Genomics Revenue: $116.4 million, a 20.3% increase over Q3 2023, with genomics unit growth accelerating to 23.9%.
- Net Loss: $(75.8) million, including $22.2 million in stock-based compensation and related payroll taxes.
- Adjusted EBITDA: Improved to $(21.8) million, an improvement of $14.4 million year-over-year.
- Full-Year 2024 Revenue Outlook: Tempus expects revenue of approximately $700 million, representing about 32% annual growth.
CEO Commentary:
“Our business showed strong performance this quarter, with significant acceleration in both genomics volume growth and data services revenue, particularly within our Insights business,” said Eric Lefkofsky, Founder and CEO of Tempus. “We are also excited to announce the acquisition of Ambry Genetics, which enhances our testing capabilities, expands our disease coverage, and strengthens our offerings to biotech and pharmaceutical partners. Ambry’s robust growth—currently at over 25% annually—along with its strong EBITDA and cash flow, positions this acquisition as a key strategic move.”
Q3 2024 Financial Breakdown:
- Genomics Revenue: $116.4 million, up 20.3% year-over-year, driven by 23.9% unit growth.
- Data and Services Revenue: $64.5 million, up 64.4% year-over-year, with a strong contribution from the Insights business.
- Gross Margin (Genomics): Non-GAAP gross margin of 49.3%, down from 51.9% in Q3 2023, due to one-time cash payments last year.
- Gross Margin (Data and Services): Non-GAAP gross margin of 78.3%, up from 60.5% in Q3 2023, driven by a 86.6% year-over-year growth in data licensing revenue.
- Operating Expenses: $159.5 million, up from $118.8 million in Q3 2023.
- Net Loss: $(75.8) million, compared to $(53.4) million in Q3 2023.
- Ending Cash & Marketable Securities: $466.3 million.
Strategic Developments:
- Collaboration with BioNTech: Tempus announced a multi-year collaboration with BioNTech to leverage its TCR (T-cell receptor) dataset in support of BioNTech’s oncology pipeline.
- Partnerships with Merck EMD and OneOncology: Tempus extended its partnership with Merck EMD for three more years and initiated a collaboration with OneOncology to scale biomarker-driven trials in the community setting.
- Launch of Olivia App: Tempus launched the beta version of Olivia, an AI-powered personal health locker that helps individuals manage and organize their health data.
Ambry Genetics Acquisition:
Tempus also revealed an agreement to acquire Ambry Genetics for $375 million in cash and $225 million in stock, with $100 million of the stock subject to a one-year lock-up period. The deal will be partially funded by a $300 million increase in short- and long-term debt from Ares, Tempus’ current lender. Ambry is expected to generate over $300 million in revenue in 2024, with EBITDA exceeding $40 million.
Ambry specializes in hereditary cancer screening and will become a key part of Tempus’ expanded testing portfolio. This acquisition will enhance Tempus’ offerings in inherited cancer risk testing and extend its reach into new disease areas, including pediatrics, rare diseases, immunology, women’s reproductive health, and cardiology.
The acquisition further aligns with Tempus’ mission to leverage data for clinical and scientific innovation and enhances its ability to support healthcare professionals making critical decisions in cancer care.
