Tempus AI, Inc.

What they do

Tempus operates two product lines: Diagnostics, which provides next-generation sequencing, PCR profiling, and other pathology tests to healthcare providers and researchers, and Data and Applications, which commercializes de-identified clinical and molecular data and offers algorithmic diagnostic and clinical decision support tools. The company aims to integrate clinical, molecular, and imaging data to enable personalized medicine.

Revenue drivers

• Diagnostics — Generated $289.3 million in Q2 2026 (76% of total revenue), up 20% year-over-year, driven by 31% Oncology volume growth despite only 5% Hereditary revenue growth.
• Data and Applications — Generated $93.2 million in Q2 2026 (24% of total revenue), up 28% year-over-year, with Insights (data licensing) growing 36%.
• Molecular residual disease (MRD) testing — MRD volume reached 9,000 tests in Q2 2026, up from 6,500 in the prior quarter, representing a fast-growing segment within Diagnostics.
• Pharmaceutical partnerships — Signed approximately $200 million in new Data and Applications licenses in Q2 2026, including deals with BioNTech, Daiichi Sankyo, Level Set Bio, and Incyte Pharmaceuticals.

Recent performance

For Q2 2026, Tempus reported total revenue of $382.5 million, up 22% year-over-year. The company achieved GAAP net income of $5.6 million, its first profitable quarter, compared to a net loss of $42.8 million in Q2 2025, though it included $98.5 million in unrealized gains on marketable securities. Adjusted EBITDA was $8.0 million, versus negative $5.6 million a year earlier. Gross profit increased 26% to $246.5 million. For the six months ended June 30, 2026, revenue was $730.6 million and net loss was $120.3 million.

Strategy

Tempus is investing heavily in AI, including generative AI and foundation models, to enhance its diagnostic tests and data products. The company is expanding its MRD capabilities through the planned acquisition of Personalis, aiming to integrate its NeXT Personal MRD technology into its platform. It is also focusing on regulatory approvals, such as the FDA approval of its tumor-only xT CDx assay, and partnerships with academic medical centers to broaden adoption. Management emphasizes that AI investments are driving growth in its two largest businesses: Oncology Diagnostics and Data Licensing.

Risks

• History of losses — The company has incurred significant net losses since inception, including a $245.0 million net loss in 2025, and may not sustain profitability.
• Reimbursement uncertainty — If third-party payers do not provide adequate coverage or reimbursement for its tests, especially the recently FDA-approved tumor-only assay, revenue could be adversely affected.
• Nascent Applications segment — The Applications product line is early-stage and may fail to achieve market acceptance or generate significant revenue.
• Data monetization risk — The business depends on continued access to and ability to monetize de-identified patient data, which faces regulatory and privacy scrutiny.

Outlook

Management increased 2026 revenue guidance to $1.595-$1.605 billion and expects full-year Adjusted EBITDA of approximately $65 million. They expect continued growth driven by Oncology Diagnostics and Data Licensing, with MRD volume and Data and Applications licenses as key contributors. The pending Personalis acquisition is expected to bolster the MRD franchise.