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01/11 11:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Tempus exhibits strong financial performance with significant revenue and gross profit growth, a positive EBITDA trend, and increased revenue guidance. The strategic partnership with AstraZeneca and Pathos enhances future revenue potential, despite some competitive and regulatory risks. The Q&A reveals optimism among analysts, though some management responses were unclear. Overall, the positive financial metrics, strategic partnerships, and growth prospects outweigh the risks, suggesting a positive stock price movement.
Quarterly Revenue $255,700,000, an increase of 75.4% year over year.
Genomics Revenue $193,800,000, representing about 89% year over year growth.
Oncology Testing Revenue Grew 31% year over year with approximately 20% volume growth.
Hereditary Testing Revenue $63,500,000, with units growing by 23%.
Revenue from Data and Services $61,900,000, which is about 43% year over year growth, led by insights or data licensing business growing 58% year over year.
Quarterly Gross Profit $155,200,000, which was 99.8% growth year over year.
Adjusted EBITDA Negative $16,200,000, an improvement of $27,800,000 year over year from negative $43,900,000 in Q1 2024.
Full Year Revenue Guidance $1,250,000,000, representing about 80% year over year growth.
Genomics Revenue: Genomics revenue was $193,800,000, which is about 89% year over year growth.
Oncology Testing Revenue: Oncology testing grew 31% year over year with approximately 20% volume growth.
Hereditary Testing Revenue: Hereditary testing contributed $63,500,000 in revenue and grew its units by 23%.
Data and Services Revenue: Revenue from data and services totaled $61,900,000, which was about 43% year over year growth.
Foundation Model Development: Announced a three-year $200 million data and modeling license agreement with AstraZeneca and Pathos to build a foundation model in oncology.
Total Remaining Contract Value: Total remaining contract value exceeded $1 billion as of April 30.
Revenue Guidance: Increased full year 2025 revenue guidance to $1,250,000,000, representing about 80% year over year growth.
Gross Profit: Generated $155,200,000 in quarterly gross profit, which was 99.8% growth year over year.
Adjusted EBITDA: Adjusted EBITDA was negative $16,200,000, an improvement of $27,800,000 year over year.
Acquisition of Deep Six: Acquisition of Deep Six enhances data connectivity and analytics capabilities.
Investment in AI and Data: Plans to invest in AI applications and data to enhance diagnostics and drive future growth.
Competitive Pressures: There is excitement among other pharmaceutical companies regarding the foundational model development deal with AstraZeneca and Pathos, but converting this interest into tangible agreements remains a challenge.
Regulatory Issues: The MRD assays are currently not reimbursed by MolDX, which limits volume growth and requires careful management of testing to avoid financial losses.
Supply Chain Challenges: Weather-related disruptions affected logistics, causing delays in test deliveries, which could impact revenue.
Economic Factors: The biotech sector is experiencing funding challenges, which could affect smaller biotech clients, although large pharma relationships remain stable.
Market Demand: There is a risk of elevated cancellations in preclinical and clinical studies among CROs, which could impact the total contract value (TCV) backlog.
Investment Risks: While the company plans to invest in AI and data capabilities, there is a risk of overextending if not managed properly, especially in a fluctuating economic environment.
Data and Modeling License Agreement: Tempest announced a three-year, $200 million data and modeling license agreement with AstraZeneca and Pathos to build the world’s largest foundation model in oncology.
Total Remaining Contract Value: The total remaining contract value exceeded $1 billion as of April 30, 2025.
Growth in Genomics Revenue: Genomics revenue increased by 89% year over year, contributing significantly to overall revenue growth.
Hereditary Testing Growth: Hereditary testing revenue grew by 23% year over year, indicating strong performance in this segment.
Data and Services Revenue Growth: Revenue from data and services grew by 43% year over year, driven by insights and data licensing.
Foundation Model Development: The foundation model is expected to be completed in 9 to 12 months, enhancing Tempest's diagnostic and data products.
Full Year 2025 Revenue Guidance: Tempest increased its full year 2025 revenue guidance to $1.25 billion, representing approximately 80% year-over-year growth.
Adjusted EBITDA Improvement: Adjusted EBITDA improved to negative $16.2 million in Q1 2025 from negative $43.9 million in Q1 2024.
ASP Improvement: ASP for oncology tests increased by approximately $60 in Q1 2025, with expectations for continued improvement as more tests migrate to the FDA-approved version.
Investment Focus: Tempest plans to invest in AI applications and genomic studies to drive future growth, particularly in the MRD space.
Shareholder Return Plan: Tempest announced a three-year data and modeling license agreement with AstraZeneca and Pathos worth $200 million. This agreement is expected to significantly enhance Tempest's revenue and is part of their strategy to leverage data for growth.
Revenue Guidance: Tempest increased its full-year 2025 revenue guidance to $1.25 billion, reflecting an 80% year-over-year growth.
Contract Value: The total remaining contract value for Tempest exceeded $1 billion as of April 30, 2025, indicating strong future revenue potential.
The earnings call reveals mixed signals: a 13% revenue decline and dependency on deferred revenue indicate challenges, while increased full-year guidance and a promising partnership with Inmar Intelligence are positives. The Q&A highlights market indecision and unclear economic outlook, which tempers optimism. However, strong deferred revenue and backlog, along with cost optimization plans, offset some concerns. Given these factors, the market reaction is likely neutral, with potential for slight positive or negative shifts depending on market cap and investor sentiment.
The earnings call summary indicates strong financial performance with 38% growth and a positive adjusted EBITDA for the first time in 10 years, suggesting effective cost management. The Q&A session highlights strong bookings and a strategic plan for sustained growth, particularly in oncology. Despite some unclear responses, the overall sentiment remains positive due to increased revenue guidance and strategic investments. The convertible notes issuance for cash savings also supports a positive outlook.
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