Q2 2026 Tempus AI Inc Earnings Call Transcript
Key Points
- Tempus AI Inc (TEM) reported a 22% year-over-year revenue increase to $382.5 million, with Diagnostics revenue up 20% and Data and Apps revenue up 28%.
- The company received FDA approval for its tumor-only xT CDx, enabling unified ADLT pricing and an estimated $85 million annual revenue uplift starting in 2027.
- Tempus AI Inc (TEM) successfully delivered the first version of its foundation model to AstraZeneca, which met acceptance criteria and strengthens its data and modeling partnerships.
- The company signed a large multiyear data licensing and modeling agreement with BioNTech, adding to a strong quarter with approximately $200 million in total bookings.
- Tempus AI Inc (TEM) completed a $460 million convertible notes offering, saving over $30 million annually in interest expense and positioning the company to achieve positive free cash flow by year-end.
- The acquisition of Personalis is expected to accelerate commercial adoption of MRD testing, with volumes growing 38% quarter-over-quarter to approximately 9,000 tests in Q2.
- The company raised its 2026 revenue guidance to $1.595-$1.605 billion (25% growth) and expects adjusted EBITDA of approximately $65 million, a $72 million improvement over 2025.
- Hereditary cancer testing revenue growth slowed to 5% year-over-year, impacted by lapping an abnormally high growth period in Q2 2025.
- The company's cash used in operating activities was still negative at $7.5 million in Q2, though improved significantly.
- The Personalis acquisition is structured as a stock transaction, and with shares trading below $46, there is potential for shareholder dilution, though the company plans to use debt to minimize it.
- The ramp-up of MRD testing sales is intentionally phased, with only about 10% of the sales force currently selling the test, limiting near-term volume growth.
- The company faces uncertainty in the rare disease segment, with the GenomeNext launch showing early promise but lacking enough data to confirm non-cannibalization of whole exome business.
- The xF liquid biopsy approval is not expected until the latter half of 2027, delaying the potential $550 ASP uplift and associated revenue benefits.
- The company's data and apps revenue growth, while strong, relies on a few large pharma clients, and any changes in their contracts could impact future revenue visibility.
Ladies and gentlemen, thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tempus AI second-quarter 2026 financial results conference call. I'd like to remind everyone that this call is being recorded (Operator Instructions)
I would now like to turn the call over to Liz Krutoholow, Vice President, Investor Relations. Please go ahead.
Thank you. Good afternoon, and welcome to Tempus' second-quarter 2026 conference call. This afternoon, Tempus released results for the quarter ended June 30, 2026. The press release and overview of the quarter and our latest presentation are available on our IR website at investors.tempus.com. Joining me today from Tempus 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
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