Tempus AI (NASDAQ:TEM) reported second-quarter revenue growth of 22% and raised its full-year outlook, citing accelerating oncology testing volumes, expanding demand for its data and artificial intelligence offerings, and expected reimbursement benefits from newly approved diagnostic products.
Revenue for the quarter ended June 30 totaled $382.5 million. Diagnostics revenue rose 20% year over year to $289.3 million, while Data and Apps revenue increased 28% to $93.2 million. The company reported GAAP net income of $5.6 million and adjusted EBITDA of $8 million, representing a $13.6 million year-over-year improvement.
Diagnostics Growth Led by Comprehensive Genomic Profiling
Tempus said slower growth in hereditary cancer testing was offset by faster growth in comprehensive genomic profiling, or CGP. Hereditary revenue increased 5% to $107.4 million, which Lefkofsky said was affected by comparisons with an unusually strong second quarter of 2025.
The company said core testing volume growth accelerated to 31% during the quarter. Chief Financial Officer Jim Rogers said the algorithm attachment rate for solid-tumor tests rose to 45%, compared with 40% cited in the first quarter. While many of those algorithms are not yet reimbursed, Rogers said they provide physicians with insights beyond standard test results and support diagnostic-volume growth.
Tempus also launched GenomeNext, its whole-genome offering for rare disease. Lefkofsky said initial demand exceeded the company’s first-month expectations, although he characterized the early volume as small and said Tempus has only one month of data following the launch. The company expects hereditary testing growth to reach the mid-teens by year-end.
FDA Approval Expected to Support Future Pricing
During the quarter, Tempus received FDA approval for tumor-only xT CDx. According to management, the approval allows the company to move its entire solid-tumor DNA portfolio to unified Advanced Diagnostic Laboratory Test, or ADLT, pricing.
Lefkofsky said the company expects the approval to result in an estimated $200 increase in average selling price, representing roughly $85 million in annualized revenue beginning in 2027.
Tempus also has its xF liquid-biopsy test before the FDA. Management said it expects a potential approval and commercial launch in the latter half of 2027. The company now estimates that xF could provide an additional $550 increase in average selling price under ADLT pricing, using an assumed $7,500 ADLT price. Lefkofsky said the company’s pricing expectations changed as comparable liquid-biopsy products established higher ADLT pricing.
Combined, Tempus expects the xT CDx and xF approvals to provide about $400 million of revenue uplift in 2028.
Data, Modeling and Pharma Agreements Expand
Tempus’ Insights data licensing and modeling business grew 36% in the quarter. The company reported about $200 million in total bookings, supported by a multiyear data licensing and modeling agreement with BioNTech as well as agreements with Daiichi Sankyo, LevelSet Bio and Incyte Pharmaceuticals.
The company also delivered the first version of its foundation model to AstraZeneca. Lefkofsky said AstraZeneca accepted the model after it met specified criteria in predicting patient responses across public and blinded clinical trials. The model was evaluated against more narrowly tailored models developed by both companies, he said.
Management said its current AstraZeneca agreement has several years remaining and that AstraZeneca has committed projects extending into 2027. Lefkofsky said the pharmaceutical company is expected to remain a significant client next year.
Tempus said customers are increasingly seeking to use Lens, its platform for accessing data, provisioning graphics processing units and building models. Lefkofsky said those capabilities are intended to increase customer retention, though he does not expect them to change the company’s revenue-recognition model. Tempus has shifted its data business in recent years toward multiyear licenses, rather than immediate revenue recognition from individual data-file sales.
Personalis Deal Targets MRD Market
On July 20, Tempus announced an agreement to acquire Personalis. Management described minimal residual disease, or MRD, testing as a more than $20 billion market and one of the fastest-growing areas in oncology diagnostics.
Tempus said Personalis’ NeXT MRD test volume increased from about 6,500 tests in the first quarter to roughly 9,000 in the second quarter, a 38% sequential increase. About 10% of Tempus’ sales force currently sells the test, reflecting reimbursed indications currently available.
Rogers said Personalis has secured coverage in several indications and has additional indications in development, which could improve average selling prices over time. Lefkofsky said the company plans to expand MRD sales efforts more substantially when reimbursement economics approach break-even or better, rather than aggressively increasing test volume while margins remain negative.
The acquisition is structured as an all-stock transaction, though Tempus can elect to pay cash for up to 50% of the consideration. Lefkofsky said the company is working to establish a debt facility and intends, depending on its stock price, to fund a substantial portion of the purchase with debt to limit shareholder dilution.
Higher 2026 Outlook and Improved Cash Flow
Tempus raised its 2026 revenue guidance to between $1.595 billion and $1.605 billion, representing approximately 25% growth. It expects adjusted EBITDA of about $65 million for the year, an improvement of roughly $72 million from 2025.
The company ended the quarter with $820.7 million in cash equivalents and marketable securities, up from $643.8 million in the prior quarter. Cash used in operating activities improved to $7.5 million during the quarter.
Tempus also completed a $460 million offering of 0% convertible senior notes due in 2032. Proceeds were used in part to repay a loan from Ares Capital. Lefkofsky said the refinancing is expected to reduce annual interest expense by more than $30 million and enable the company to achieve positive free cash flow by the end of 2026.
About Tempus AI (NASDAQ:TEM)
Tempus is a technology-driven healthcare company that applies artificial intelligence and machine learning to clinical and molecular data in order to advance precision medicine. Its primary focus lies in oncology, where the company offers comprehensive genomic profiling, digital pathology services and data-driven insights to inform personalized cancer care. By integrating DNA and RNA sequencing with structured clinical information, Tempus enables clinicians and researchers to identify targeted treatment options for patients based on the genetic characteristics of their tumors.
The company’s core offering centers on a scalable, cloud-based analytics platform that aggregates vast amounts of molecular and clinical data.
