U.S. may expand Nvidia and AMD’s 15% China chips deal to other companies
Introduction & Market Context
Tempus AI Inc. (NASDAQ:TEM) presented its Q2 2025 investor presentation on August 8, 2025, showcasing substantial revenue growth and significant progress toward profitability. The AI-driven precision medicine company’s stock jumped 8.36% in premarket trading to $63.65, rebounding from previous volatility following Q1 results.
The company continues to position itself at the intersection of artificial intelligence and healthcare, with a particular focus on diagnostics. Tempus maintains that "based on recent advancements, including generative AI, the time is now. AI is finally ready to transform healthcare," according to its presentation materials.
Quarterly Performance Highlights
Tempus reported exceptional financial results for Q2 2025, with total revenue increasing 89.6% year-over-year to $314.6 million, accelerating from the 75.4% growth reported in Q1. This performance was driven by strength across all business segments.
As shown in the following quarterly results summary:
Genomics revenue, which includes both oncology and hereditary testing, reached $241.8 million, representing 115.3% growth compared to Q2 2024. Within this segment, oncology testing delivered $133.2 million (up 32.9% year-over-year) with approximately 26% volume growth, while hereditary testing contributed $97.3 million (up 33.6% year-over-year) with approximately 32% volume growth.
The company’s data and services business also performed well, with revenue totaling $72.8 million, a 35.7% increase versus the prior year. This growth was led by the Insights data licensing business, which grew 40.7% year-over-year.
Gross profit showed even more dramatic improvement, reaching $195.0 million, a 158.3% increase compared to Q2 2024. The company also made substantial progress toward profitability, reporting an Adjusted EBITDA loss of just $5.6 million, compared to a $31.2 million loss in the same period last year.
The following chart illustrates the company’s revenue and Adjusted EBITDA trends:
Strategic Initiatives
Tempus highlighted several strategic initiatives during the quarter, with particular emphasis on its AI capabilities and data assets. The company has amassed one of the largest healthcare datasets in the world, with over 350 petabytes of multimodal healthcare data, including more than 40 million patient records and approximately 4 million sequenced samples.
A significant development was the announcement of a collaboration with AstraZeneca (NASDAQ:AZN) and Pathos AI to build what the company describes as "the largest multimodal foundation model" in oncology. The non-exclusive collaboration includes $200 million in data licensing and model development fees to Tempus.
As detailed in the following slide about the collaboration:
In the genomics business, Tempus introduced Tempus xM™ to monitor immune checkpoint inhibitor response and expanded its exclusive collaboration with Personalis (NASDAQ:PSNL) to include colorectal cancer. The company also received FDA 510(k) clearance for a second ECG algorithm, demonstrating progress in its regulatory strategy.
The company’s hereditary testing business continues to show strong momentum following the Ambry Genetics acquisition, which closed on February 3, 2025. The growth in this segment is driven by increasing recognition of inherited cancer risks and expanded NCCN guideline recommendations.
The following chart shows the growth in hereditary testing volume:
Detailed Financial Analysis
A closer examination of Tempus’ financial performance reveals improving metrics across multiple dimensions. The company’s oncology testing business has shown consistent growth in both volume and average revenue per test, with the latter reaching $1,584 in Q2 2025, up from $1,530 in 2024.
The following chart illustrates this trend:
The data licensing business also demonstrates strong customer retention, with a Year End 2024 Data Licensing Retention rate of approximately 140% and a Total (EPA:TTEF) Remaining Contract Value exceeding $940 million. This suggests strong future revenue visibility for this segment.
The company’s balance sheet was strengthened during the quarter through a $750 million convertible senior note offering with a 0.75% interest rate, providing additional capital for growth initiatives.
The comprehensive financial performance summary for Q2 2025 compared to Q2 2024 is shown below:
Forward-Looking Statements
Tempus provided updated guidance for 2025, targeting revenue of approximately $1.26 billion, which represents approximately 82% year-over-year growth. This is a slight increase from the $1.25 billion guidance provided after Q1 results.
More significantly, the company now expects to achieve positive Adjusted EBITDA of approximately $5 million for the full year 2025, representing a $110 million improvement over 2024. This would mark a significant milestone in the company’s path to profitability.
As detailed in the following guidance slide:
For Q3 2025, Tempus anticipates recognizing approximately $330 million, or about 26% of its annual revenue guidance. The company noted that its 2025 guidance includes approximately 11 months of Ambry revenue, given that the acquisition closed in February 2025.
Tempus continues to invest in its AI and data infrastructure, with a focus on developing its foundation model in oncology and expanding its suite of applications that integrate with electronic health records. The company maintains connections with over 4,500 healthcare institutions, including more than 65% of all Academic Medical (TASE:BLWV) Centers and over 50% of oncologists in the U.S., positioning it well for continued growth in precision medicine.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.