Tempus AI (TEM) Q2 FY26 earnings call: guidance and Q&A

Seeking clarity on Personalis' ASP improvement trajectory and how incremental MRD data will enhance Tempus' data offering for biopharma clients.

Management explained that Personalis' ASPs are expected to improve with additional indications securing coverage, and volumes will increase by expanding the sales force. Eric highlighted that MRD data is becoming crucial for biopharma clients to understand study endpoints and patient recurrence earlier than traditional scans, making it a compelling component of their data offering.

“Almost every major biopharma client we have that's running large studies is trying to understand the endpoint of those studies... And more and more, you're getting earlier signals from these kind of MRD tests that are showing signs of cancer recurring 6 months or 12 months before a scan.”

asked by Kallum Titchmarsh · answered by James Rogers, Eric Lefkofsky

Inquiring about the specifics of the foundation model delivery to AstraZeneca and the implications for the long-term contract, especially regarding potential escalators and the role of the foundation model.

Eric confirmed the foundation model was accepted by AZ after meeting performance criteria against their internal models, calling it a "huge hurdle." He clarified that the current AZ agreement extends for "a couple of years" (through '28 or something) and expressed confidence that AZ would opt for a long-term extension to avail themselves of discounts, given their satisfaction with the partnership.

“the fact that we've met the acceptance criteria means that they're comfortable this model is predictive and can now serve as the foundation even though it's a foundation model for all kinds of R&D and development work they're doing. So that's a huge hurdle and we're ecstatic.”

asked by Bradley Bowers · answered by Eric Lefkofsky

Asked for clarification on the increased xF FDA clearance tailwind ($5.50 vs $2.30 previously) and the likelihood of Personalis terminating the acquisition if Tempus' share price falls below $46.

Jim explained the xF pricing assumption evolved due to other liquid biopsy approvals setting higher price points, leading to an anticipated $7,500 ADLT price. Eric stated he couldn't envision Personalis terminating the deal, emphasizing Tempus' ability to use cash as a lever to minimize dilution and Personalis' strong desire for the deal to close.

“For xF, Mark, we're assuming a $7,500 [ ALT ] price.”

asked by Kyle Mikson · answered by James Rogers, Eric Lefkofsky

Inquired about the momentum in the Data and Insights business, especially with recent deals and bookings, and how this impacts visibility for hitting data revenue guidance.

Eric described the data business as "on fire" with more momentum and a stronger pipeline than ever, leading to great visibility for growth rates in 2026, 2027, and even 2028. He highlighted that new deals involve deeper integration with Lens and GPU access, increasing stickiness, and reiterated the goal of maintaining long-term growth in the "close to 30% range."

“the data business is just on fire. We've had more momentum in terms of signing deals than we've had in like a long time in years... And more importantly, what's really exciting is they don't just want our data, they want access to Lens.”

asked by Matthew Shea · answered by Eric Lefkofsky

Asked why the MRD sales force isn't being ramped up faster, given the Personalis acquisition, and if the company is waiting for the deal to close.

Eric explained that the ramp-up is tied to achieving breakeven ASPs for the MRD tests, to avoid burning money on tests with negative margins. He stated that while they are growing fast (38% QoQ), they don't believe it's a "beachfront real estate" market requiring immediate, unprofitable expansion. He also noted that the core business's gross margin growth allows for strategic investments in sales force expansion without negatively impacting EBITDA or FCF.

“the same constraints we had when we didn't own Personalis will be the same constraints we'll have even after this transaction closes, which is we just want to time the full unshackling of these efforts to having the tests on an ASP level be basically breakeven.”

asked by Mark Massaro · answered by Eric Lefkofsky

Inquired about updates on the rare disease ramp within Ambry following the GenomeNext launch and what a successful second half would look like.

Eric stated the GenomeNext launch was "great," exceeding expectations by 50% in its first month, though volumes are still small. He sees some upside in the back half of the year for whole genomes and aims for hereditary growth rates to reach "mid-teens growth by the end of the year." He noted that it's not currently cannibalizing the whole exome business and that the overperformance of oncology testing and data businesses provides flexibility.

“The launch was great. Great, meaning we had an expectation for the first month. And I think I'm going to say something like 2 or 3 weeks in, we were already 50% higher than our expectation.”

asked by Robert Bamberger · answered by Eric Lefkofsky

Asked about the current solid tumor algorithm attach rate in Q2, its drivers, and its embedded impact on guidance.

Jim stated the algorithm attach rate in Q2 was 45%, up from 40% in Q1, and is "broad-based" across various algorithms. He clarified that many algorithms are not yet paid, so they don't impact revenue directly but highlight Tempus' diagnostic advantage and drive core volume growth (which accelerated to 31% in Q2).

“Yes. So the algorithm attach rate in Q2 was 45%, so a slight uptick from the 40% that we had quoted in Q1.”

asked by Robert Bamberger · answered by James Rogers