Tempus AI, Inc. (TEM) Q3 2026 Earnings Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to Tempest Q3 26 Financial Results Call. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Elizabeth Krutoholow. VP of Investor Relations. Please go ahead.

Elizabeth Krutoholow: Thank you, Matt. Good morning, and welcome to Tempest's third quarter 26 conference call. This morning, Tempus released results for the quarter ended 09/30/2026. The press release, overview of the quarter, and our latest presentation are available on our web. IR website at investors.tempus.com. Joining me today are Eric Lefkofsky, founder and CEO of Tempus, and Jim Rogers, CFO. Before we begin, I would like to remind you that during this call, management will be making forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to our 10 ks and other subsequent filings with the SEC. During the call, we will discuss non GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. Definitions of these non GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, which is available on our IR page. We will now turn the call over to Eric.

Eric Lefkofsky: Q3 was an incredibly strong quarter for Tempest. With broad based growth across both our diagnostics and data and applications businesses. Momentum from the first half of 2026 carried into the third quarter. With total revenue of $412 million increasing 23% year over year, led by accelerating unit growth of 32% in our Oncology business and increasing momentum of 33% revenue growth in Data and Apps. Our diagnostics business delivered $304 million of revenue, an increase of 20% year over year, driven by oncology revenues, which grew 28% with volume growth of 32%. As we continue to see some of the strongest unit volume growth we have seen in years. Oncology revenues were $173 million and hereditary cancer testing revenues were $111 million Data and apps revenues were $108 million. Increasing 33% year over year, as that business continues to outperform. Led by Insights, our data licensing segment, which grew 29%. These results reinforce the durability of our model as our best in class diagnostic platform. Enhances our data and AI offerings, distinguishes our business from our many competitors, and helps drive the performance we have delivered consistently quarter after quarter. There were also several notable highlights since our last quarterly call. We entered into a strategic collaboration with Bristol Myers Squibb, or BMS, whereby we agreed to license BMS oncology data and models for up to $138 million over a 5-year term. Additionally, BMS, Pathos, and Tempus have entered into a collaboration to build data sets and models for Alzheimer's disease. Through this collaboration, Pathos is paying Tempus $55 million over a 5-year term. As a result, over the next approximately 5 years, we expect to generate $193 million of additional data and applications revenue from these agreements alone. This is 1 of our largest strategic collaborations to date. And it is nice to see BMS join the likes of AstraZeneca, Merck, GlaxoSmithKline, and BioNTech. As I have said before, if we signed just 1 of these big collaborations, we would be content. We have signed 3 this year alone. We announced a multiyear strategic collaboration with Moderna and Merck, to support the potential commercialization of their novel first in class individualized neoantigen therapy or INT, being evaluated in combination with Keytruda in patients with completed resected stage IIb-IV melanoma and other cancer types. Given the exceptional response of the clinical trial data so far, and the potential for this drug to be transformational, We are excited by the future of this program and thrilled to be partnering with Moderna and Merck. We cleared regulatory review of our pending acquisition of Personalis, and a Personalis shareholder meeting to approve the transaction is scheduled for November 30. We are more convinced than ever of the synergies between our combined companies. We have been the exclusive distributor of Personalis' tumor informed MRD assay NEXT since 23. Which we believe is a best in class assay given its ultra sensitivity. MRD represents an estimated $20+ billion market. And is 1 of the fastest growing segments in oncology diagnostics. It is transformative for cancer care. Allowing clinicians to detect disease recurrence earlier than traditional imaging enabling more informed treatment decisions when cancer recurs. Bringing Personalis' testing portfolio under 1 roof will accelerate commercial adoption, round out our overall portfolio, and strengthen the multimodal data flywheel that continues to differentiate our business. We generated $25.6 million in adjusted EBITDA and ended the quarter with $854 million in cash and marketable securities. We had long suspected that with gross profit dollar growth outpacing our investments, we would eventually turn the corner and be able to generate meaningful EBITDA. This quarter, we made the turn. Despite our increasing investments in diagnostics, we have always been a tech company. Our entire business model was built around the idea of collecting vast amounts of real time multimodal de identified data to both improve clinical decisions and enhance research. A decade later, those efforts have allowed us to amass more than 600 petabytes of rich data adding more than 50 petabytes last quarter alone. Along with the technology infrastructure that is connected to approximately 8 thousand providers enabling us to use that data to train models and generate insights. The scale of our business and the breadth of our portfolio has allowed us to build a significant data moat. By compounding a decade of investment in our AI capabilities, we deliver solutions that grow more powerful with every patient touch point, cementing our position as an indispensable engine for health care innovation. As the world gets hungrier for the benefits AI can deliver, namely allowing people to live longer and healthier lives, Tempus is uniquely positioned as we have strategically amassed the data needed to power these models and the distribution platform to deliver them to patients. As a result of our financial performance this quarter, we are increasing guidance to $1.60 to $1.6 billion in 2026. We continue to expect 2026 adjusted EBITDA to be approximately $65 million And with that, we will open it up to questions.

Operator: We will now begin the question and answer session. Please limit yourself to 1 question. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question comes from the line. Of Kyle Mikson with Canaccord Genuity. Kyle, your line is open. Please go ahead.

Kyle Mikson: Hey, guys. Thanks for the questions. Congrats on the quarter. So 1 question on Hereditary. You are hoping that return to stable growth next year. But just given these proposed clinician lab fee schedule rates, that [Inaudible], I am just wondering how you are thinking about potential headwinds there. Given you then obviously have ASP tailwinds on the oncology side. So maybe just talk about diagnostics outlook for 2027.

Eric Lefkofsky: Yeah. Hey, I can start. So I think the overall hereditary business seems to be poised to do kind of much better as we move forward than it has over the last few quarters. In large part because it is both lapping excessive growth last year, which we have talked about relative to the some of the market dynamics where you had a big player in the market that was having some financial issues, a bunch of volume moved over. And so instead of kind of nice, you know,, whatever, near 15% growth year after year, you have this, like, jump up to 30% growth that we are now lapping. We have seen some good signs of that in September and October. We are unit growth rates have returned to low double digits. So we feel overall like that business is moving in a better direction. And whatever macro headwind there is in terms of guidance, is kind of small compared to the, you know, just massive unaddressed TAM relative to the fact that current guidelines and current reimbursement would cover about 70 million lives in the U.S. We run something like 2 million tests a year. So I think we still have a very underpenetrated market I suspect, you know, as more and more literature comes out finding the clear links between germline variants and diseases that can be prevented or managed earlier you will see this category continue to be stable and grow. And Jim can cover ASPs on the oncology side.

James Rogers: Yeah. So on ASPs for hereditary as a reminder, obviously, cancer makes up the majority of that revenue, but we do have a small but growing rare business. And so know, we do not anticipate material impacts from Gamma on the hereditary cancer rates. And then, you know, we have long said that the hereditary rates for us will actually probably increase slightly over time as rare becomes a bigger kind of piece of the overall pie. So that is that is the story on ASPs for hereditary. And then on the oncology side, as we have talked about, you know, given the expansion of our FDA approval to include tumor-only for XT test, That updated pricing will kick in on January 1 and allow us to move the remaining XT over. That gives us about $80 million of uplift in oncology ASP. In 2027. Then we still have XF kind of going through the FDA process And once, you know, that kind of finalizes that process and hopefully gets approved, then there will be even a larger increase as we migrate XF to the FDA approved version of the assay. So lots of tailwind from ASP expected on the oncology side beginning early in 2027. And we do not anticipate much impact on the hereditary basis.

Kyle Mikson: Perfect. Thanks, guys.

Operator: Your next question comes from the line of Parth Talsania with Cantor Fitzgerald. Parth, your line is open. Please go ahead.

Analyst: Thank you. I was hoping you could talk a little bit about the headwinds and tailwinds in 2027. So can we assume it is CGP volume holds in the low 20s and D&A might be closer to 30% than 25%. You have still got the incremental gross profit, 2 thirds of it, even after Personalis being reinvested Can we get to the 25% long term range? And thinking out further once we get the benefit of XT and XF uplift 2028 be a year above that 25% CAGR.

Eric Lefkofsky: Yeah. I mean, I think, so first of all, we feel like a business of our size growing at 25% a year over a long term is incredibly healthy. So we have always said we are more interested in long term 25% growth than we are in kind of you know, short term 30% growth that then decelerates. So and, I mean, when you when you talk about a business that is going to do a few billion dollars in revenue, that is growing at 25%, that means, like, literally that, you know, every year you are adding $500 million or more of new revenue then that becomes a billion of new revenue and more and more. So we are we are into the law of large numbers. We are fortunate that our 2 main businesses our oncology sequencing business, is experiencing strong unit growth, about 32%. it is actually up from last quarter. it is got obviously rising ASPs both because our solid tumor portfolio is about to be reimbursed at the ADLT rate and then when you get into the later part of the year, you will have FDA. Could have FDA approval where you are gonna get an even bigger step up. So we have got really strong unit growth, rising ASPs. Our data business is performing even better in the aggregate at about 33% growth. And obviously, we have announced a string of very big deals with Merck and BioNTech and now BMS. And so it is really the core businesses are super strong. But, you know, we have other businesses like hereditary growing slower, and so in the aggregate, we feel like this kind of 25 plus percent growth rate is achievable and achievable long term. Is it possible that you get into 2027 or 2028 and have moments where the business is growing significantly faster either because of ASP lift or because the data business just is running really hot. Yes. But even if it is, even if we deliver a quarter where the aggregate growth is materially higher, I will say the same thing, which is it is great. I am glad But, you know, at the end of the day, if you can sustain kind of 25% growth over a decade or another decade, will build a really large business. And we think we are building a really large business.

Analyst: Thank you.

Operator: Your next question comes from the line of Mark Massaro with BTIG. Mark, your line is open. Please go ahead.

Mark Massaro: Hey, guys. Thank you for taking the questions. Nice continued growth in MRD. You know, you are tracking at about up 3 thousand units per quarter. Recognizing that only 15 of your Salesforce is selling today, and the shareholder meeting is sort of around the corner after Thanksgiving, you just give us a sense for once Personalis is in your portfolio to what extent you plan to ungate and let the remaining 85% of reps sell the test. Is that something that we could expect in the first half of 27? Or is that. Are there other criteria you need to see later in the year?

Eric Lefkofsky: I think it is going to be largely a function of it is more a function of reimbursement than it is a function of closing the deal. We have to be sensitive that at the present moment when Personalis runs these tests, they lose money. And once we acquire them, we will be in the same boat. Granted, we are in this really nice place where given the 3, you know, categories they have got reimbursement for 2026, they are in this rising ASP landscape where they are getting much closer to being breakeven on an individual test basis. And we think with some of the approvals coming, obviously, I think, you know, in categories like colorectal cancer, we think we will turn that corner where I on a per test basis, they are generating basically positive gross profit. that is a big unlock to really ramp up. Now that said, we are still ramping now. We are adding sales for. Adding sales, you know, members to our team in the aggregate across all of our different assay categories, and we will, you know, in 27, dial up MRD in sales efforts. But the big unlock, which I suspect will be I do not know, could be midyear. It could be Q2. It could be Q3. Who knows? But somewhere, I suspect, midyear, you will be in this boat where they will turn the corner and be kind of positive gross profit dollar contribution on a per test basis. And then we will feel much better about really starting to put the pedal to the metal. And so I think over the latter half of 2027 into 2028, I would suspect growth will continue to be really strong.

Mark Massaro: Great. Thank you.

Operator: Your next question comes from the line of Brad Bowers with Mizuho. Brad, your line is open. Please go ahead.

Bradley Bowers: Hey there. Thank you. Wanted to maybe ask another 1 on MRD while we are here. You know, definitely understand the timing with respect to how much you are getting paid per test, and colorectal is a big unlock. Do you think about the competitive landscape that you are launching into? Obviously, Tempest has a lot of things that it offers to physicians. The allow the test to win kind of at the physician level, but maybe just wanted to hear about the MRD offering kind of as it is fully rolled into Tempus and how that compares you know, to competition and how we can maybe think about market share expectations for the test? Thank you.

Eric Lefkofsky: Yes. I will jump in. So we. The assay, first of all, is best in class. I mean, it is. In terms of. Its performance, it performs as well as any assay out there. Obviously, we think it is better but it has. it is a super well performing assay. So we. We are never meeting with oncologists, whether it is academic medical center community practitioners who are saying, God, I just wish you had a better test. They love the test. So the real unlock to volume is just that the full you know, Tempest sales machine is kind of unlocked to sell MRD at scale. And that, again, is a function of you know, do you have unit economics that support that? And we are getting we are getting very close. I think once that is in place, you know, the same benefits that drive our CGP business, which is, you know, this kind of best in class technology stack deep integration to thousands of hospitals, a broad compendium of tests that all are interconnected with clinical insights algorithmic diagnostics that all just literally feeds perfectly into MRD. And our clients, our physicians are, you know, interested in us offering more and more broadly And so I think there is really no competitive impediment to us getting to real scale. And I would suspect I think I have said this before, that at the end of the day, you know, what Tempest has done that is, I think, unique is no other company like ours is number 1 or number 2 in more than 1 category. Know, we are number 1 or number 2 in solid. We are number 1 or number 2 in liquid. obviously number 1 or number 2 in hereditary cancer profiling, and we will be number 1 or number 2 in MRD, I think. there is just no reason for me to believe that market will not evolve the same way. When we entered solid tumor profiling, foundation medicine was every bit the kind of Goliath that Natera is today. And the same thing in liquids. So I suspect we will you know, do quite well in MRD because we wrap all this technology and all this AI and all this contextualization around these tests. And we just become you know, a test of preference for our physicians.

Bradley Bowers: Thank you.

Operator: Your next caller comes from the line of Ryan MacDonald with Needham. Ryan, your line is open. Please go ahead.

Ryan MacDonald: Thanks for taking my question, and congrats on a nice quarter. Eric and Jim, maybe to talk about the success you are seeing in the data business Obviously, amazing year so far with the 500. Over $550 million of bookings throughout the year. I guess as you look at sort of maybe the state of the pipeline and maybe the seasonality of the business and sort of demand cycle, are you seeing any changes in terms of pull forward of demand? And then as we think about sort of the components of the pipeline, what is the mix that you are seeing sort of within oncology, neuro, cardiology, some of these other areas. Jim, how does this sort of make you feel about the level of visibility going into 2027, you know, to sort of hit those 25% to 30% targets that you are looking for in the business? Thanks.

James Rogers: You want to take it? Yeah. I mean, I. I would say that, you know, the pipeline. We have been talking about this now for several quarters. Let's say, kind of towards the tail end of last year, we saw kind of an uptick in engagement with our biopharma partners. We started kind of commenting on it then, and I think you have kind of seen it play out in the deals that we have announced thus far this year. And the beauty of these deals are, you know, as we kind of march our customers up from being kind of episodic purchasers to these large strategic you know, collaborations. It obviously just enhances the level of visibility that we have for that business. So you are no longer, you know, trying to get deals signed. You have them in kind of under contract for kind of 5, 6 years, very long term deals that give us that visibility. And so as we enter 2027, we are. We feel like we are in a really strong position to see that growth, not only in 2027, but 2028, 2029 as well.

Eric Lefkofsky: Yeah. And I will just jump in. I mean, I think the nice part about the data business that we have been able to build is, you know, we used to. Our business here, about 4 or 5 years ago, was much more lumpy and episodic in terms of the way we did these deals. But over the last, you know, half a decade, we have really migrated people to long term subscriptions where people are basically connecting to our Lens platform have access to the totality of our data. They are able to, based on the level of subscription they sign up for, pick a certain number of files that they can download annually, and do work with more and more. As we have mentioned, they are now connecting that data to kind of private GPU clusters that we set up for them. Where they can build models that they can keep in our environment to basically do a bunch of their AI modeling work. So it just. It becomes much smoother long term sticky. So it is nice to kind of be going into. We will be going into 2027 in, like, the strongest position we have been in a long time, we said that same thing going into 2026.

James Rogers: And 1 more thing that I would add is, you know, 1 of the exciting things about the BMS collaboration is the work that we are doing in Alzheimer's. You know, we have long talked about expanding beyond oncology, although oncology drove you know, most of the revenue to date. The datasets that we have invested in over the last 10 years expand well beyond a oncology and other disease areas and see that demand pick up expand beyond oncology is something we are really pretty excited on.

Operator: Your next question comes from the line of Ricki Levitus. With Goldman Sachs. Evie, your line is open. Please go ahead.

Analyst: Great. Thanks so much for taking my questions. So given this strength, think you mentioned in the AI modeling portion of the Insights business, how does this change the stickiness of the relationships with your customers? And then maybe touch on what percentage of the insights data customers also utilize AI modeling and then how you expect this to evolve into next year?

Eric Lefkofsky: Yeah. I think the stickiness is essentially a function of how we have designed the data business. So as I mentioned a second ago, you go back, we started licensing data maybe, I do not know, roughly 6 or 7 years ago, something like that. And back then, you would you would be like, oh, I want 1 thousand files of cancer patients that look like this, and we would de identify that data, and then you would download that data in your environment. And so we did not know what you were doing with the data. We did not know how you were, you know, how. what of value you were getting from it. We did not. We would hope that you would call back 6 months later, a year later, want more data, but it was very transactional. Over time, we basically said, look, we built this very large environment. You know, we have something like 700 software engineers that have been working here for almost a decade. So we built this very large multimodal technology environment to interrogate this kind of data. We started saying to our clients, why do not you do that work in our environment? it is it is just we have invested way more in it than you have. And so people began doing more and more of their analytic work, generating insights from the data in our Lens platform. And then over time, we move to this kind of concept of, okay. We will actually put all the data in Lens, You can build cohorts of interest in Lens, pull down the data--the exact data you want, the exact patients you want, which typically have criteria that would almost match a trial. On inclusion exclusion criteria. We are going, like, deep characteristics of a cohort. Pull that data into a workspace within our environment, build, you know, kind of either do your analytics or build models, and then you are off and running. And, obviously, that latter part of building models is new. You used to be able to just kind of do analytics and then kind of take the analytics out or download the files directly in your own environment. But now we are connecting Lens to, you know, 8 GPUs, 16 GPUs, 32 GPUs, some kind of cluster like that. Typically denominations of 8. Where clients are signing up for, like, 3 years of 32 GPUs. Or 3 years of 64 GPUs. And they will build their building models in our environment that either have to stay in our environment or you pay an egress free to pull them out. And so it is gone from, like, not sticky to crazy sticky and so we just. You know, in light of how people are using our data today, we just do not know how they would unmask it off unless somebody else builds the same set of products we have built, which we do not see.

Analyst: Alright. Thank you.

Operator: Your next question comes from the line of Subbu Nambi with Guggenheim. Subbu, your line is open. Please go ahead.

Subbu Nambi: Hey, guys. Good morning. Thank you for taking my question. In your letter, you specifically call out strength in excess of order requisitions being up 25% year over year. Could you give us any additional color on what is driving strength? Is there any specific indication or academic setting, community setting EMR integration, any reason? Thank you.

Eric Lefkofsky: I am happy to start. So you have some kind of macro trends, which we have talked about a bit in the past. That are just driving in the aggregate some overall liquid volume. 1 of them is the benefits of concurrent testing as for metastatic patients, is just high. So there is just been a ton of literature over the past few years about the. About mutations, driver mutations you can find from solid tumor profiling or liquid profiling that you have to do both to find all of them and that. And we published on this as well, but it can be 10 to 20 percent of mutations that would be therapeutically relevant that you will not find if you only do solid tumor profiling or you only do liquid biopsies. So you have this movement to kind of do both more often for later stage patients that are at high risk of mortality. And then you also have the benefits of kind of earlier testing serial testing for certain indications where more and more it is becoming important to be changing therapies every 6 months or every year and getting another insight from a test. So Liquid is just the beneficiary of that. We have seen it I think, overall in the market Guardant, who is a leader in that space, has posted really strong unit volume as well. And we just see this as a as a kind of a near term trend of really robust growth in liquid. Up until now, our growth rates have been relatively consistent. Solid's been growing really strong as has liquid. We have historically called out that it is not meaningful to talk about the difference between the 2 of them. that is still the case for Q3. Our solid portfolio grew really quickly. We did see a sign here in September, which we called out that we saw this kind of uptick of, whatever, 300, 400 basis points. If that continues into Q4, you will start to see the first signs of really between liquid and solid where even with really strong growth rates in solid, liquid's outperforming. And with that plus MRD, you know, it could be a propellant of growth rates over the next several quarters.

Subbu Nambi: Perfect. Thank you so much, guys.

Operator: Next question comes from the line of Daniel Brennan with TD Cowen. Daniel, your line is open. Please go ahead.

Daniel Brennan: Great. Thank you. Thanks for the question. Sorry for the voice here. Maybe just on EBITDA. Nice print. Consensus has margins expanding next year, I think, to 7% and then 11% in 2028 And there is always just push and pull for diagnostic companies how much you reinvest back in the business versus let it drop through. So I am wondering you have got that slide in the deck showing EBITDA like a line going up. Like the 7 and 11, is that like a reasonable ramp how you guys think about it? And know, connected to that, I know you have the $2.6 thousand realized oncology price that you also pointed to in the next few years to dream meaningfully above what we have today. So I am just wondering how much of that increase in oncology pricing you guys would be inclined to drop through to the bottom line. Thank you.

James Rogers: Want me to start, and then you will jump in? More than happy to start, then you can you can jump in. So, you know, I think our you know, view on EBITDA kind of remains the same. You know, we are we are still relatively early days on a lot of the offerings. And so we have had this perspective of kind of reinvesting 2/3 or roughly 2 thirds of any incremental gross profit dollars that we generate back in the business and then letting 1/3 drop down to the bottom. Bottom line. So, you know, obviously, with Personalis is coming on board, we are already going to invest in MRD. We will utilize some of that reinvestment dollars to absorb the burn from personalis. But then after another couple years, then that flips, right? Then you are you are generating, you know, meaningful gross profit dollars such that you really only need to invest 1/3, and kind of 2/3 drop down to the bottom of it. So I want to demonstrate that we continue to see leverage in the business, which we saw, obviously, a big step forward of that in the quarter. But we are not in a position where we wanna maximize EBITDA in the short term. We think the opportunity is set across our entire portfolio is so large that would be a poor choice in our. Given that we are at in our life cycle.

Eric Lefkofsky: Yeah. And I was just gonna add, you know, we have obviously, you know, kind of now you can start to see this really strong EBITDA trend line that is picking up. But Personalis, you know, and assuming that obviously closes here the next whatever late in Q4, they are burning money. And so you have to look at both businesses as 1. We will have to absorb some of their losses. But even absorbing their losses we still expect you know, improvements in EBITDA, and we are on a really nice trajectory. We are we have got to decide you know, how to invest the strong gross profit dollar growth we are generating quarter after quarter.

Operator: Your last analyst question comes from the line of Daniel Arias with Stifel. Daniel, your line is open. Please go ahead.

Dan Arias: Yeah. Hi, guys. Thanks for the questions here. Eric or Jim, within data, can you just maybe catch us up on where trials might land for the year? On revenues or growth? And then what the outlook might be there in the context of where AI is helping the cause? I mean, trial matching seems to be 1 of these areas where pharma folks are most encouraged about how things can get better with some of these newer capabilities. So curious whether you see an inflection there in the next year or 2.

Eric Lefkofsky: Yeah. We. So we took our real-time or just in time clinical trial matching business, which we call Thyme, We tried to build a marketplace for a while to see if, like, small biotech could load in their trials and, you know, would this marketplace evolve? We just did not see that we did not see that growth so we pivoted the business really about a year ago, maybe 18 months ago, to be more enterprise focused on our largest enterprise data clients. So we are fortunate now that this network, which spans you know, north of a thousand oncologists across the country and has this really robust platform to be able to identify patients that are fit for a trial and get them on a trial produces what you know, what pharma needs badly, which is enrollments. We. We are a high generator of enrollments for pharma, and so it is a really nice asset. And but I do not think it is going to scale into a billion dollar business. And so we had to essentially target it toward hey. We are in these strategic partnerships with more and more large pharma clients, whether that is BMS or Merck or AstraZeneca or whatever. And these folks want and need help, and we are tightly integrated. And so the. Our time network now is enterprise focused where you as a client have to come on and load on you know, all or most of your oncology trials, and that is how it. that is how the baskets are built. And we have a wait list of folks now that want into that network, so the kind of market dynamics have allowed that to become a really premium product. I suspect it will continue to grow nicely. it is just not gonna be a huge business. On the other side of our clinical trial matching business, our CRO business, as we mentioned years ago, we have been kind of deemphasizing some of the just pure CRO work. Because there are other people that do that, and do it well. And it is a business that is in significant flux relative to artificial intelligence. And what that is going to mean for the administrative and logistic components of the CRO. And you are obviously seeing a lot of these big new frontier modeling companies do deals with big departments and big pharma trying to figure some of that out. Fortunate that we do not play in that space. it is not important to us. And so you know, we are we are kind of. We will we will let other people tackle that.

Elizabeth Krutoholow: I will now pass the call back to Kendra for additional Q&A. Thank you, Matt. For the first time, we are pleased to answer questions submitted by retail investors through the Robinhood platform. Our first question, can you classify the opportunity for growth outside of oncology? Can you detail cardiology opportunities and other therapeutic areas of interest like nephrology, immunology, and neurology.

Eric Lefkofsky: Yeah. So, I mean, obviously, as you mentioned a few minutes ago, 1 of the biggest, you know, benefits to the BMS deal is that it is our first really large deal outside oncology. So all of a sudden, we are building a very large Alzheimer's data set. So it is a $55 million deal to generate a data set of like half a million patients with Alzheimer and late stage dementia. So it is it is really exciting. We have done smaller projects historically in data and apps to enter these new businesses, but this is really the first time someone's making a very large investment in real world data with Tempest to build these kind of agentic platforms. And we are excited because we think it is the start of a whole new round of growth for our data business. And we suspect it is going to continue at scale.

Elizabeth Krutoholow: On the diagnostic side, we obviously are big in oncology. Do a bit of neuropsych testing. We do a bit of rare disease. We do some rare testing. it is more a function of where there is reimbursement for these tests. And we, like other companies, kinda have to follow the reimbursement landscape goes before we can enter new categories. But we do have 1 of the broader portfolios today because we are in rare. We are in neuro. We do some cardio testing, obviously, with big cancer portfolio. We touch a bunch of disease areas.

Operator: Next question, if investor appetite for AI related companies weakens, how confident are you that operating cash flow in existing liquidity can fund your growth plans and the Personalis acquisition?

Eric Lefkofsky: I am super confident.

James Rogers: Jim, you wanna you want to jump in? Or Yeah. I mean, I would say that the nice thing, in part, of the reason our business model is different is we are not overly reliant on 1 product. And so we have a very strong diagnostics business Obviously, growth rates have been really strong in oncology. We are entering this period of kind of increasing ASPs pretty dramatically. You know, almost $750 over the next couple years. And a lot of those dollars can be used to kind of fund investments, you know, elsewhere. Similarly, on the data side, you know, as we continue to sign up kind of these long term agreements, with biopharma, again, gives us that visibility over the next several years to kind of continue growth. And lastly, as we mentioned on kind of previous calls, you know, we are we are reinvesting, you know, heavily today. And, certainly, those investments are meant to drive long term growth. So you can always scale that level of investment as necessary as well. But to Eric's point, you know, we are very confident being able to fund our growth.

Operator: Our last retail question. Since data is the main input for diagnostics in using AI to interpret and generate an outcome based on the data, can Tempus ensure that it has a growing inflow of patient data? How can it ensure that it will have access to it in the future since it does not own the patient data?

Eric Lefkofsky: Yeah. So first of all, our diagnostic business is important for the data business, no question. Obviously, we are fortunate that we are 1 of the largest sequencers of patients for next generation sequencing in the world. And so we have a very broad portfolio from hereditary profiling to comprehensive genomic profiling when a patient's being treated to MRD and multiple diseases that we would suspect there is gonna be a you know, constant flow of new diagnostic data entering our platform. That said, if you look at the 50 million patients or so within Tempus' dataset today, you know, more than 80% of those patients are outside oncology. Even the patients within oncology think more than 80%, we did not sequence. They. They are basically patients where the data is coming in because we have many, many, many data partnerships with academic medical centers and community practitioners. We have different products we offer where we get data as part of that as part of the product offering in terms of closing care gaps or matching patients to clinical trials. And so we have a constant stream of data coming in from more than 8 thousand providers. And so we have kind of, over the last decade, very intentionally tried to make sure that the pipes that bring data into our platform are highly diversified so that we never have to worry about is the data gonna dry up. And just as we have, you know, crossed this chasm where the business is generating really strong gross profit dollar growth and EBITDA and will generate tons of cash flow. it is the same thing on the data side. We just have so much data flowing from so many directions. That we have hedged that risk.

Elizabeth Krutoholow: Thanks, Eric, and thank you all for joining our call this morning. Have a great week.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.