Tempus AI, Inc. (NASDAQ: TEM), a technology company driving AI adoption in precision medicine and patient care, released its financial results for the third quarter of 2024. The company achieved strong performance with accelerated volume growth in its genomics business and accelerated revenue growth within its data and services business, particularly in the Insights segment. Concurrent with the earnings release, Tempus announced an agreement to acquire Ambry Genetics, a prominent player in genetic testing known for exploring the connections between genetics and disease.
Ambry Genetics anticipates exceeding $300 million in revenue and $40 million in EBITDA for the 2024 calendar year. This acquisition, valued at $375 million in cash and $225 million in shares (with $100 million subject to a one-year lock-up agreement), will be partially financed by a $300 million debt increase from Ares, Tempus’ existing lender. Ambry is a key player in hereditary cancer screening and currently serves as Tempus’ primary reference lab in this area. The integration of Ambry is expected to broaden Tempus’ testing portfolio, expand its disease coverage, and enhance product offerings for biotech and pharmaceutical partners. It also offers significant strategic value due to Ambry’s current revenue growth rate exceeding 25% annually and its robust EBITDA and cash flow generation. The acquisition aligns with Tempus’ broader strategy of leveraging data to fuel clinical and scientific advancements.
The acquisition of Ambry Genetics will expand and enhance Tempus’ hereditary cancer screening portfolio and allow the company to explore new disease categories such as pediatrics, rare diseases, immunology, women’s reproductive health, and cardiology. These services are increasingly vital for healthcare professionals making critical decisions for cancer patients and their families.
Tempus reaffirmed its full-year 2024 revenue projection of approximately $700 million, reflecting about 32% year-over-year growth. The company also anticipates an adjusted EBITDA of approximately $(105) million, a $50 million improvement compared to 2023.
For the third quarter of 2024, Tempus reported $180.9 million in revenue, a 33% increase over the $136.1 million reported for the same period in 2023. Genomics gross margin was 48.4%, while data and services gross margin reached 76.8%. Operating expenses totaled $159.5 million, resulting in a net loss of $(75.8) million. Non-GAAP genomics gross margin was 49.3% and non-GAAP data and services gross margin was 78.3%. Non-GAAP operating expenses were $139.3 million, leading to an adjusted EBITDA of $(21.8) million.
A conference call and webcast discussing the quarter’s results were held on November 4, 2024. Further details and a recording of the event are available on Tempus’ investor relations website. TD Cowen served as the exclusive financial advisor to Tempus for the Ambry Genetics acquisition, while Morgan Stanley, J.P. Morgan, and Allen & Company LLC advised on the security financing.
Jon Napitupulu is Director of Media Relations at The Clinical Trial Vanguard. Jon, a computer data scientist, focuses on the latest clinical trial industry news and trends.
