Tempus Reports Third Quarter 2024 Results and Agreement to Acquire Ambry Genetics

Tempus AI, Inc. (NASDAQ: TEM), a technology company leading the adoption of AI to advance precision medicine and patient care, today reported financial results for the quarter that ended September 30, 2024. The company also announced that it has entered into an agreement to acquire Ambry Genetics, a leader in genetic testing that aims to improve health by understanding the relationship between genetics and disease.

  • Revenue increased 33.0% year-over-year to $180.9 million in the third quarter of 2024
  • Data and services revenue growth accelerated to 64.4% year-over-year
  • Genomics unit growth accelerated to 23.9% annually with rising average revenue per clinical test
  • Net Loss of $(75.8 million), which included $22.2 million of stock compensation expense and related employer payroll taxes
  • Adjusted EBITDA improved $14.4 million year over year to $(21.8 million)
  • Expect full year 2024 revenue of ~$700 million, which represents ~32% annual growth

For additional information on the quarter, including a letter from our CEO and CFO, please visit our investors relations site at investors.tempus.com.

“The overall business performed well in the quarter, as demonstrated by accelerating volume growth in our genomics business and accelerating revenue growth in our data and services business, specifically within Insights,” said Eric Lefkofsky, Founder and CEO of Tempus. “We’re also excited to announce the pending acquisition of Ambry Genetics, which broadens our testing portfolio, expands our disease coverage, and enhances the types of products we can offer to our biotech and pharmaceutical partners. In addition, Ambry is uniquely positioned given that its revenues are currently growing at north of 25% a year and it generates meaningful EBITDA and cash flow.”

Third Quarter 2024 Financial Results

 

 

Three Months Ended September 30,

 

 

 

 

 

 

2024

 

 

2023

 

 

Change

 

 

 

(in thousands, except percentages)

 

 

 

 

 

 

(unaudited)

 

 

 

 

GAAP Results

 

 

 

 

 

 

 

 

 

Revenue

 

$

180,929

 

 

$

136,057

 

 

 

33.0

%

Genomics gross margin

 

 

48.4

%

 

 

51.9

%

 

NM(1)

 

Data and services gross margin

 

 

76.8

%

 

 

60.5

%

 

NM(1)

 

Operating expenses

 

$

159,455

 

 

$

118,816

 

 

NM(1)

 

Net loss

 

$

(75,840

)

 

$

(53,426

)

 

NM(1)

 

Non-GAAP Results

 

 

 

 

 

 

 

 

 

Non-GAAP Genomics gross margin

 

 

49.3

%

 

 

51.9

%

 

(260 bps)

 

Non-GAAP Data and services gross margin

 

 

78.3

%

 

 

60.5

%

 

1780 bps

 

Non-GAAP Operating Expenses

 

$

139,284

 

 

$

118,816

 

 

 

17.2

%

Adjusted EBITDA

 

$

(21,843

)

 

$

(36,206

)

 

 

39.7

%

_______________

(1) Not meaningful due to the impact of including stock compensation expense and related employer payroll taxes

  • Genomics revenue of $116.4 million in the third quarter of 2024, an increase of $19.6 million or 20.3% over the third quarter of 2023, with 23.9% unit growth.
  • Data and services revenue of $64.5 million in the third quarter of 2024, an increase of $25.3 million or 64.4% over the third quarter of 2023.
  • Non-GAAP Genomics gross margin was 49.3% in the third quarter of 2024, compared to 51.9% in the third quarter of 2023, largely related to one-time cash payments in 2023.
  • Non-GAAP Data and services gross margin was 78.3% in the third quarter of 2024, compared to 60.5% in the third quarter of 2023, led by Insights, or data licensing revenue, which grew 86.6% year over year.
  • Net Loss of $(75.8 million), which included $22.2 million of stock compensation and related employer payroll taxes compared to net loss of $(552.2 million) in the second quarter of 2024, including $493.1 million of stock compensation and related employer taxes and net loss of $(53.4 million) in the third quarter of 2023.
  • Adjusted EBITDA $(21.8 million) in the third quarter of 2024, compared to $(31.2 million) in the second quarter of 2024, and $(36.2 million) in the third quarter of 2023.
  • Ending cash and marketable securities were $466.3 million.

Additional Operating Highlights

  • Announced a multi-year first of its kind collaboration with BioNTech to leverage Tempus’ TCR dataset in support of BioNTech’s next-generation oncology pipeline.
  • Announced a 3 year extension with Merck EMD at the culmination of our last 3 year strategic agreement.
  • Initiated a collaboration with OneOncology to bring more biomarker-driven trials to patients in the community setting at scale.
  • Initiated the beta launch of our patient-facing app, Olivia, an AI-enabled personal health locker that empowers individuals to holistically organize, store, and manage their own health data through our generative AI healthcare concierge.

Ambry Genetics Acquisition

Tempus today announced that it has entered into an agreement to acquire Ambry Genetics, a leader in genetic testing. Under the terms of the agreement, Tempus will pay $375 million in cash and $225 million in shares at closing, of which $100 million will be subject to a lock-up agreement until one year post-transaction close. The deal is expected to be financed in part through a $300 million increase in short and long term debt provided by Ares, Tempus’ current lender. Ambry expects to generate >$300 million in revenue in calendar year 2024 and EBITDA of >$40 million. For more information on Ambry and its impact, see Tempus’ latest investor deck.

Ambry is a leader in hereditary cancer screening and currently serves as Tempus’ main reference lab in this category. The acquisition will provide Tempus with expanded testing capabilities for inherited cancer risk. These services are becoming more and more important for healthcare professionals navigating critical medical decisions with cancer patients and their relatives.

In addition to expanding and enhancing the company’s hereditary screening portfolio, the acquisition of Ambry will complement Tempus’ strategy of using data to advance clinical and scientific innovation. Ambry’s extensive product offerings will also allow Tempus to expand into new disease categories, including pediatrics, rare disease, immunology, women’s reproductive health, and cardiology.

Financial Outlook and Guidance

Tempus continues to expect full year 2024 revenue of approximately $700 million, which represents approximately 32% year-over-year growth and approximately $(105 million) in adjusted EBITDA, an improvement of approximately $50 million over 2023.

Webcast and Conference Call Information

A conference call and webcast will begin today, November 4, 2024 after market close at 4:30 p.m. Eastern Time. Interested parties may access details at:

Conference ID: 7177136

Domestic Dial-in Number: (800) 715-9871

International Dial-in Number: (646) 307-1963

Live Webcast: https://edge.media-server.com/mmc/p/btq3mpjc

The webcast may be accessed on the company’s investor relations website at investors.tempus.com. For those unable to listen to the live webcast, a recording will be made available on the company’s website after the event and will be accessible for one year. Visit the investor relations website to find the company’s latest deck, and commentary on the quarter by Eric Lefkofsky, Founder and CEO and Jim Rogers, CFO, which will be discussed on the conference call and webcast.

About Tempus

Tempus is a technology company advancing precision medicine through the practical application of artificial intelligence in healthcare. With one of the world’s largest libraries of multimodal data, and an operating system to make that data accessible and useful, Tempus provides AI-enabled precision medicine solutions to physicians to deliver personalized patient care and in parallel facilitates discovery, development and delivery of optimal therapeutics. The goal is for each patient to benefit from the treatment of others who came before by providing physicians with tools that learn as the company gathers more data. For more information, visit tempus.com.

Non-GAAP Financial Measures

In addition to the financial information presented in this release in accordance with accounting principles generally accepted in the United States of America (GAAP), Tempus also presents adjusted non-GAAP financial measures.

Non-GAAP gross profit is defined as GAAP gross profit, excluding stock-based compensation expense and employer payroll tax related to stock-based compensation (collectively, the “stock-based compensation adjustments”). Non-GAAP gross margin is defined as gross profit, excluding the stock-based compensation adjustments, as a percentage of revenue. Non-GAAP operating expenses are calculated as the sum of technology research and development expense, research and development expense, and selling, general and administrative expense, excluding the stock-based compensation adjustments. Non-GAAP net income (loss) is defined as net income (loss), adjusted to exclude (i) losses on equity method investments, (ii) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (iii) the payment of $2.3 million of our Series G-4 convertible preferred stock in connection with the initial public offering (the “G-4 Special Payment”), and (iv) amortization of deferred other income from our IP License Agreement with SB Tempus. Non-GAAP net income (loss) per share is defined as adjusted net income (loss) divided by weighted average common shares outstanding, basic and diluted.

EBITDA is defined as net income (loss), adjusted to exclude (i) interest income, (ii) interest expense, (iii) depreciation and amortization, and (iv) provision for (benefit from) income taxes. Adjusted EBITDA is defined as net income (loss), adjusted to exclude (i) interest income, (ii) interest expense, (iii) depreciation and amortization, (iv) provision for (benefit from) income taxes, (v) losses on equity method investments, (vi) changes in fair value of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities and indemnity-related holdback liabilities, (vii) stock-based compensation expense, (viii) employer payroll tax related to stock-based compensation expense, (ix) the G-4 Special Payment, and (x) amortization of deferred other income from our IP License Agreement with SB Tempus. Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue.

Tempus believes these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by institutional investors and the analyst community to help them analyze the health of Tempus’ business. In particular, Adjusted EBITDA is a key measurement used by Tempus management to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Tempus does not provide guidance for net loss, the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA, and similarly cannot provide a reconciliation between Ambry's forecasted EBITDA and its net income (loss) or between Tempus' forecasted Adjusted EBITDA and net loss without unreasonable effort due to the unavailability of reliable estimates for certain components of net income (loss) and the respective reconciliations. These forecasted items are not within Tempus’ or Ambry's control, as applicable, may vary greatly between periods and could significantly impact future financial results.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, about Tempus, Ambry and their respective industries that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including, but not limited to, Tempus’ expected financial results for full year 2024 and Ambry's expected financial results for calendar year 2024; the contributions of Tempus’ research and findings to the larger scientific community, the use of Tempus’ products and services to advance clinical care for patients, and the pending acquisition of Ambry. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Tempus cautions you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. Tempus has based the forward-looking statements contained in this press release primarily on its current expectations and projections about future events and trends that it believes may affect Tempus’ business, financial condition, results of operations and prospects. These forward-looking statements are subject to risks and uncertainties related to: the intended use of Tempus’ products and services; Tempus’ financial performance; the ability to attract and retain customers and partners; managing Tempus’ growth and future expenses; competition and new market entrants; compliance with new laws, regulations and executive actions, including any evolving regulations in the artificial intelligence space; the ability to maintain, protect and enhance Tempus’ intellectual property; the ability to attract and retain qualified team members and key personnel; the ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures or investments, including our ability to consummate the acquisition of Ambry Genetics and the related financing on the terms described herein or at all and, if consummated, to realize the expected benefits of such acquisition; the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in the section titled “Risk Factors” in Tempus’ Form 10-Q for the quarter ended June 30, 2024 filed with the Securities and Exchange Commission (“SEC”) on August 6, 2024, pursuant to Rule 424(b)(4) under the Securities Act, as well as in other filings Tempus may make with the SEC in the future, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. In addition, any forward-looking statements contained in this press release are based on assumptions that Tempus believes to be reasonable as of this date. Tempus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Advisors

TD Cowen served as the sole financial advisor representing Tempus in the purchase of Ambry Genetics. Morgan Stanley, J.P. Morgan, and Allen & Company LLC represented the company in security financing.

Tempus AI, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net revenue
Genomics

$

116,422

 

$

96,815

 

$

331,315

 

$

270,797

 

Data and services

 

64,507

 

 

39,242

 

 

161,403

 

 

113,301

 

Total net revenue

$

180,929

 

$

136,057

 

$

492,718

 

$

384,098

 

Cost and operating expenses
Cost of revenues, genomics

 

60,126

 

 

46,540

 

 

181,285

 

 

138,781

 

Cost of revenues, data and services

 

14,964

 

 

15,490

 

 

52,384

 

 

40,690

 

Technology research and development

 

30,680

 

 

24,156

 

 

135,655

 

 

70,485

 

Research and development

 

27,348

 

 

23,234

 

 

119,713

 

 

66,268

 

Selling, general and administrative

 

101,427

 

 

71,426

 

 

644,063

 

 

211,662

 

Total cost and operating expenses

 

234,545

 

 

180,846

 

 

1,133,100

 

 

527,886

 

Loss from operations

$

(53,616

)

$

(44,789

)

$

(640,382

)

$

(143,788

)

Interest income

 

4,789

 

 

1,483

 

 

7,538

 

 

5,864

 

Interest expense

 

(13,761

)

 

(12,342

)

 

(40,294

)

 

(33,245

)

Other (expense) income, net

 

(11,522

)

 

2,287

 

 

(17,821

)

 

7,909

 

Loss before provision for income taxes

$

(74,110

)

$

(53,361

)

$

(690,959

)

$

(163,260

)

Provision for income taxes

 

(38

)

 

(65

)

 

(144

)

 

(74

)

Losses from equity method investments

 

(1,692

)

 

 

 

(1,692

)

 

(301

)

Net Loss

$

(75,840

)

$

(53,426

)

$

(692,795

)

$

(163,635

)

Dividends on Series A, B, B-1, B-2, C, D, E, F, G, G-3, and

G-4 preferred shares

 

 

 

(11,143

)

 

(39,347

)

 

(32,709

)

Cumulative undeclared dividends on Series C preferred

shares

 

 

 

(764

)

 

(1,174

)

 

(2,230

)

Net loss attributable to common shareholders, basic and diluted

 

(75,840

)

 

(65,333

)

 

(733,316

)

 

(198,574

)

Net loss per share attributable to common shareholders, basic

and diluted

$

(0.46

)

$

(1.03

)

$

(7.04

)

$

(3.14

)

Weighted-average shares outstanding used to compute net loss

per share, basic and diluted

 

165,612

 

 

63,286

 

 

104,164

 

 

63,267

 

Comprehensive Loss, net of tax
Net loss

$

(75,840

)

$

(53,426

)

$

(692,795

)

$

(163,635

)

Foreign currency translation adjustment

 

10,302

 

 

(54

)

 

10,203

 

 

(29

)

Comprehensive loss

$

(65,538

)

$

(53,480

)

$

(682,592

)

$

(163,664

)

 

Tempus AI, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share amounts)

 

 

 

September 30,

2024

 

December 31,

2023

Assets
Current Assets
Cash and cash equivalents

$

388,006

 

$

165,767

 

Accounts receivable, net of allowances of $1,154 and $1,115 at September 30, 2024 and December 31, 2023, respectively

 

145,616

 

 

94,462

 

Inventory

 

36,138

 

 

28,845

 

Warrant asset

 

 

 

5,070

 

Prepaid expenses and other current assets

 

31,335

 

 

17,295

 

Marketable equity securities

 

78,317

 

 

31,807

 

Deferred offering costs

 

 

 

7,085

 

Total current assets

$

679,412

 

$

350,331

 

Property and equipment, net

 

59,392

 

 

61,681

 

Goodwill

 

73,365

 

 

73,354

 

Warrant asset, less current portion

 

 

 

4,930

 

Intangible assets, net

 

14,289

 

 

21,916

 

Investments and other assets

 

8,692

 

 

8,971

 

Investment in joint venture

 

103,699

 

 

 

Warrant contract asset, less current portion

 

17,866

 

 

21,499

 

Operating lease right-of-use assets

 

14,141

 

 

20,530

 

Restricted cash

 

872

 

 

840

 

Total Assets

$

971,728

 

$

564,052

 

 
Liabilities, Convertible redeemable preferred stock, and Stockholders' equity (deficit)
Current Liabilities
Accounts payable

 

49,027

 

 

54,421

 

Accrued expenses

 

101,985

 

 

82,517

 

Deferred revenue

 

67,604

 

 

64,860

 

Deferred other income

 

15,955

 

 

 

Other current liabilities

 

9,913

 

 

8,213

 

Operating lease liabilities

 

5,894

 

 

6,437

 

Accrued data licensing fees

 

2,242

 

 

6,382

 

Accrued dividends

 

 

 

9,797

 

Total current liabilities

$

252,620

 

$

232,627

 

Operating lease liabilities, less current portion

 

26,664

 

 

32,040

 

Convertible promissory note

 

174,460

 

 

193,124

 

Warrant liability

 

76,900

 

 

34,500

 

Other long-term liabilities

 

15,403

 

 

19,751

 

Interest payable

 

66,529

 

 

55,321

 

Long-term debt, net

 

264,527

 

 

256,541

 

Deferred other income, less current portion

 

27,921

 

 

 

Deferred revenue, less current portion

 

12,976

 

 

16,768

 

Total Liabilities

$

918,000

 

$

840,672

 

 
Commitments and contingencies (Note 8)
Convertible redeemable preferred stock, $0.0001 par value, no and 69,803,765 shares authorized at September 30, 2024 and December 31, 2023, respectively; no and 63,525,953 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $0 and $1,130,429 at September 30, 2024 and December 31, 2023, respectively

 

 

 

1,105,543

 

 
Stockholders' equity (deficit)
Class A Voting Common Stock, $0.0001 par value, 1,000,000,000 and 200,228,024 shares authorized at September 30, 2024 and December 31, 2023, respectively; 150,280,363 and 58,367,961 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

$

15

 

$

6

 

Class B Voting Common Stock, $0.0001 par value, 5,500,000 and 5,374,899 shares authorized at September 30, 2024 and December 31, 2023, respectively; 5,043,789 and no shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

 

1

 

 

 

Non-voting Common Stock, $0.0001 par value, no and 66,946,627 shares authorized at September 30, 2024 and December 31, 2023, respectively; no shares issued and outstanding at September 30, 2024, and 5,205,802 shares issued and 5,060,336 shares outstanding at December 31, 2023

 

 

 

0

 

Treasury Stock, 145,466 shares at September 30, 2024 and December 31, 2023, at cost

 

(3,602

)

 

(3,602

)

Additional Paid-In Capital

 

2,184,926

 

 

18,345

 

Accumulated Other Comprehensive Income

 

10,208

 

 

5

 

Accumulated deficit

 

(2,137,820

)

 

(1,396,917

)

Total Stockholders' equity (deficit)

$

53,728

 

$

(1,382,163

)

Total Liabilities, Convertible redeemable preferred stock,

and Stockholders' equity (deficit)

$

971,728

 

$

564,052

 

 

Tempus AI, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands, except per share amounts)

 

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

Operating activities
Net loss

$

(692,795

)

$

(163,635

)

Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liability

$

42,400

 

$

(8,000

)

Stock-based compensation

 

509,351

 

 

 

Gain on warrant exercise

 

(173

)

 

 

Gain on marketable equity securities

 

(5,119

)

 

 

Losses from equity method investments

 

1,692

 

 

301

 

Amortization of original issue discount

 

1,036

 

 

778

 

Amortization of deferred financing fees

 

383

 

 

382

 

Change in fair value of contingent consideration

 

165

 

 

(400

)

Amortization of warrant contract asset

 

3,633

 

 

4,961

 

Depreciation and amortization

 

27,788

 

 

24,509

 

Provision for bad debt expense

 

545

 

 

1,538

 

Change in fair value of warrant asset

 

(18,302

)

 

 

Amortization of finance right-of-use lease assets

 

 

 

283

 

Non-cash operating lease costs

 

4,670

 

 

5,077

 

Minimum accretion expense

 

85

 

 

292

 

Impairment of intangible assets

 

 

 

7,359

 

PIK interest added to principal

 

6,567

 

 

2,123

 

Change in assets and liabilities
Accounts receivable

 

(51,699

)

 

(25,365

)

Inventory

 

(7,293

)

 

(4,875

)

Prepaid expenses and other current assets

 

(14,040

)

 

(3,665

)

Investments and other assets

 

(410

)

 

(4,378

)

Accounts payable

 

(24,776

)

 

(12,253

)

Deferred revenue

 

(1,052

)

 

(16,644

)

Deferred other income

 

43,876

 

 

 

Accrued data licensing fees

 

(4,250

)

 

(8,374

)

Accrued expenses & other

 

23,371

 

 

20,749

 

Interest payable

 

11,208

 

 

11,724

 

Operating lease liabilities

 

(6,655

)

 

(6,559

)

Net cash used in operating activities

$

(149,794

)

$

(174,072

)

 
Investing activities
Purchases of property and equipment

$

(14,159

)

$

(31,899

)

Proceeds from sale of marketable equity securities

 

23,098

 

 

 

Business combinations, net of cash acquired (Note 4)

 

 

 

(2,869

)

Investment in joint venture

 

(95,186

)

 

 

Purchases of marketable equity securities

 

(36,183

)

 

 

Net cash used in investing activities

$

(122,430

)

$

(34,768

)

 
Financing activities
Proceeds from issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions

$

381,951

$

Tax withholding related to net share settlement of restricted stock units

 

(69,918

)

 

 

Issuance of Series G-5 Preferred Stock

 

199,750

 

 

 

Principal payments on finance lease liabilities

 

 

 

(288

)

Purchase of treasury stock

 

 

 

(3,602

)

Payment of deferred offering costs

 

(8,587

)

 

(574

)

Dividends paid

 

(5,625

)

 

(5,625

)

Proceeds from long-term debt, net of original issue discount

 

 

 

48,750

 

Payment of indemnity holdback related to acquisition

 

(813

)

 

 

G-4 Special Payment

 

(2,250

)

 

 

Net cash provided by financing activities

$

494,508

 

$

38,661

 

Effect of foreign exchange rates on cash

$

(13

)

$

(24

)

 
Net increase (decrease) in Cash, Cash Equivalents and Restricted Cash

$

222,271

 

$

(170,203

)

Cash, cash equivalents and restricted cash, beginning of period

 

166,607

 

 

303,731

 

Cash, cash equivalents and restricted cash, end of period

$

388,878

 

$

133,528

 

 
Cash, Cash Equivalents and Restricted Cash are Comprised of:
Cash and cash equivalents

$

388,006

 

$

132,706

 

Restricted cash and cash equivalents

 

872

 

 

822

 

Total cash, cash equivalents and restricted cash

$

388,878

 

$

133,528

 

 
Supplemental disclosure of cash flow information
Cash paid during the year for interest

$

20,899

 

$

12,293

 

Cash paid for income taxes

$

127

 

$

101

 

 
Supplemental disclosure of noncash investing and financing activities
Dividends payable

$

5,487

 

$

6,912

 

Purchases of property and equipment, accrued but not paid

$

6,706

 

$

5,049

 

Deferred offering costs, accrued but not yet paid

$

179

 

$

2,849

 

Redemption of convertible promissory note

$

18,664

 

$

22,220

 

Non-voting common stock issued in connection with business combinations

$

344

 

$

4,305

 

Operating lease liabilities arising from obtaining right-of-use assets

$

550

 

$

1,097

 

Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering

$

1,348,809

 

$

 

Taxes related to net share settlement of restricted stock units not yet paid

$

164

 

$

 

Reclassificiation of deferred offering costs to additional paid-in capital upon initial public offering

$

12,347

 

$

 

Issuance of Series G-3 Preferred Stock

$

3,809

 

$

2,738

 

Issuance of Series G-4 Preferred Stock

$

611

 

$

 

 

Tempus AI, Inc.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands, except percentages and per share amounts)

Genomics Gross Profit & Gross Margin

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Genomics revenue

$

116,422

 

$

96,815

 

$

331,315

 

$

270,797

 

Cost of revenues, genomics

 

60,126

 

 

46,540

 

 

181,285

 

 

138,781

 

Gross profit, genomics

$

56,296

 

$

50,275

 

$

150,030

 

$

132,016

 

Stock-based compensation expense

 

1,083

 

 

 

 

12,410

 

 

 

Employer payroll tax related to stock-based compensation

 

26

 

 

 

 

162

 

 

 

Non-GAAP gross profit, genomics

$

57,405

 

$

50,275

 

$

162,602

 

$

132,016

 

Genomics gross margin

 

48.4

%

 

51.9

%

 

45.3

%

 

48.8

%

Stock-based compensation expense

 

0.9

%

 

0.0

%

 

3.7

%

 

0.0

%

Employer payroll tax related to stock-based compensation

 

0.0

%

 

0.0

%

 

0.0

%

 

0.0

%

Non-GAAP gross margin, genomics

 

49.3

%

 

51.9

%

 

49.1

%

 

48.8

%

 

Data and Services Gross Profit & Gross Margin

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Data and services revenue

$

64,507

 

$

39,242

 

$

161,403

 

$

113,301

 

Cost of revenues, data and services

 

14,964

 

 

15,490

 

 

52,384

 

 

40,690

 

Gross profit, data and services

$

49,543

 

$

23,752

 

$

109,019

 

$

72,611

 

Stock-based compensation expense

 

916

 

 

 

 

8,145

 

 

 

Employer payroll tax related to stock-based compensation

 

43

 

 

 

 

162

 

 

 

Non-GAAP gross profit, data and services

$

50,502

 

$

23,752

 

$

117,326

 

$

72,611

 

Gross margin, data and services

 

76.8

%

 

60.5

%

 

67.5

%

 

64.1

%

Stock-based compensation expense

 

1.4

%

 

0.0

%

 

5.0

%

 

0.0

%

Employer payroll tax related to stock-based compensation

 

0.1

%

 

0.0

%

 

0.1

%

 

0.0

%

Non-GAAP gross margin, data and services

 

78.3

%

 

60.5

%

 

72.7

%

 

64.1

%

 

Total Gross Profit & Gross Margin

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net revenue

$

180,929

 

$

136,057

 

$

492,718

 

$

384,098

 

Cost of revenues

 

75,090

 

 

62,030

 

 

233,669

 

 

179,471

 

Gross profit

$

105,839

 

$

74,027

 

$

259,049

 

$

204,627

 

Stock-based compensation expense

 

1,999

 

 

 

 

20,555

 

 

 

Employer payroll tax related to stock-based compensation

 

69

 

 

 

 

324

 

 

 

Non-GAAP gross profit

$

107,907

 

$

74,027

 

$

279,928

 

$

204,627

 

Gross margin

 

58.5

%

 

54.4

%

 

52.6

%

 

53.3

%

Stock-based compensation expense

 

1.1

%

 

0.0

%

 

4.2

%

 

0.0

%

Employer payroll tax related to stock-based compensation

 

0.0

%

 

0.0

%

 

0.1

%

 

0.0

%

Non-GAAP gross margin

 

59.6

%

 

54.4

%

 

56.8

%

 

53.3

%

 

Operating Expenses

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

Technology research and development

$

30,680

$

24,156

$

135,655

$

70,485

Stock-based compensation expense

 

3,929

 

 

54,363

 

Employer payroll tax related to stock-based compensation

 

192

 

 

1,441

 

Non-GAAP technology research and development

$

26,559

$

24,156

$

79,851

$

70,485

Research and development

$

27,348

$

23,234

$

119,713

$

66,268

Stock-based compensation expense

 

2,554

 

 

44,787

 

Employer payroll tax related to stock-based compensation

 

134

 

 

810

 

Non-GAAP research and development

$

24,660

$

23,234

$

74,116

$

66,268

Selling, general and administrative

$

101,427

$

71,426

$

644,063

$

211,662

Stock-based compensation expense

 

12,556

 

 

389,646

 

Employer payroll tax related to stock-based compensation

 

806

 

 

3,388

 

Non-GAAP selling, general and administrative

$

88,065

$

71,426

$

251,029

$

211,662

Operating expenses

$

159,455

$

118,816

$

899,431

$

348,415

Stock-based compensation expense

 

19,039

 

 

488,796

 

Employer payroll tax related to stock-based compensation

 

1,132

 

 

5,639

 

Non-GAAP operating expenses

$

139,284

$

118,816

$

404,996

$

348,415

 

Earnings per Share

 

Three Months Ended

September 30, 2024
Nine Months Ended

September 30, 2024
Net loss

$

(75,840

)

$

(692,795

)

Fair value changes(1)

 

15,605

 

 

19,885

 

Stock-based compensation expense

 

21,038

 

 

509,351

 

Employer payroll tax related to stock-based compensation

 

1,201

 

 

5,963

 

G-4 Special Payment

 

 

 

2,250

 

Amortization of technology license

 

(3,989

)

 

(3,989

)

Non-GAAP net loss

$

(41,985

)

$

(159,335

)

Non-GAAP net loss per share

$

(0.25

)

$

(1.53

)

Weighted average common shares outstanding, basic and diluted

 

165,612

 

 

104,164

 

(1) Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities.

Adjusted EBITDA

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

$

(75,840

)

$

(53,426

)

$

(692,795

)

$

(163,635

)

Interest income

 

(4,789

)

 

(1,483

)

 

(7,538

)

 

(5,864

)

Interest expense

 

13,761

 

 

12,342

 

 

40,294

 

 

33,245

 

Depreciation

 

6,788

 

 

5,404

 

 

19,472

 

 

15,658

 

Amortization

 

2,652

 

 

2,920

 

 

8,316

 

 

8,851

 

Provision for income taxes

 

38

 

 

65

 

 

144

 

 

74

 

EBITDA

$

(57,390

)

$

(34,178

)

$

(632,107

)

$

(111,671

)

Losses on equity method investments

 

1,692

 

 

 

 

1,692

 

 

301

 

Fair value changes(1)

 

15,605

 

 

(2,028

)

 

19,885

 

 

(7,728

)

Stock-based compensation expense

 

21,038

 

 

 

 

509,351

 

 

 

Employer payroll tax related to stock-based compensation

 

1,201

 

 

 

 

5,963

 

 

 

G-4 Special Payment

 

 

 

 

 

2,250

 

 

 

Amortization of technology license

 

(3,989

)

 

 

 

(3,989

)

 

 

Adjusted EBITDA

$

(21,843

)

$

(36,206

)

$

(96,955

)

$

(119,098

)

(1) Fair value changes include gains and losses related to quarterly fair value adjustments of our warrant liability, warrant asset, marketable equity securities, contingent consideration liabilities, and indemnity-related holdback liabilities. 

 

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