Source Report

**Genomics Segment (Diagnostics): Tempus AI's Genomics generates revenue through next-generation sequencing (NGS) tests billed to physicians and payors upon result delivery, with reimbursement net of allowances based on historical collections (e.g., Medicare ADLT rates), creating a volume-driven flywheel where higher test volumes feed proprietary data into the AI platform—ASP improvements from FDA approvals like xT CDx migrate tests from ~$2,900 LDT to $4,500 reimbursed rates, boosting margins from 46% in FY2024 to 60% in FY2025 while organic volume grew 30% excluding Ambry acquisition.[1][2]
- FY2025 revenue: $955.4 million (111.5% YoY growth); Q4 2025: $266.9 million (121.6% YoY).[1]
- Oncology (Tempus core): $139.5 million in Q3 2025 (31.7% YoY, 27% volume growth to ~87,500 NGS tests); Hereditary (Ambry): $102.6 million in Q3 (32.8% pro forma YoY, 37% volume); FY Oncology ASP: $1,510 (up from $1,450 in 2024).[3]
- Key products: xT CDx (648-gene solid tumor NGS, FDA-approved, $4,500 ASP); xF (105-gene liquid biopsy, $3,288 CMS rate); xR (RNA, 510(k)-cleared); xM MRD (4,700 tests Q4, 56% QoQ); ~30% xT volume migrated to CDx in Q3 2025.[1]
- Gross margins: FY2025 59.6% (non-GAAP 60.3%), driven by reimbursement tailwinds (e.g., xT CDx >$500 ASP uplift expected).
For competitors like Guardant or Natera entering, Tempus's integrated data moat (8M+ de-identified records) enables multimodal algos bundled free with tests, locking in 87% physician retention for high-volume users—new entrants lack this scale, facing 40-50% gross margins without AI differentiation.[4]

**Data & Services / AI Segment: Tempus monetizes its multimodal dataset (clinical/molecular/imaging from Genomics) via multi-year subscriptions and one-time licenses to biopharma, recognized ratably over access periods or upon delivery, with 126% NRR from expansions like the $200M AstraZeneca/Pathos foundation model deal—Insights dominates as low marginal cost (data already generated), yielding 73% margins vs. Genomics' 60%, while AI apps scale via EHR integration without heavy sales spend.[1][4]
- FY2025 revenue: $316.4 million (30.9% YoY); Q4: $100.4 million (25.1% YoY); Insights: 38% YoY growth, Q4 69.5% (ex-AZ warrant); TCV >$1.1B (up from $940M end-2024), $2B+ contracts signed.[2]
- Sub-breakdown (2024 for reference, similar FY2025 structure): Insights ~77% ($186.8M), Trials/TIME ~17% ($42.4M), AI/Algos ~5% ($12.4M); Q3 2025 Insights $69M (implied ~85%), TIME $9.2M (~11%).[4][5]
- Key products: Lens platform (data access/AI tools); >8M records delivered; partnerships (19/20 top pharmas).
For data rivals like Flatiron or ConcertAI, Tempus's real-time Genomics linkage (e.g., 270k+ annual oncology tests) enables unique multi-omics RWD for AI training—licensing at 140% NRR creates a moat where scale begets better models, pricing out smaller datasets.[1]

**Emerging Insights Division: Referred to as the data licensing powerhouse within Data & Services, Insights licenses de-identified multimodal libraries (clinical/molecular/imaging) plus analytics/cloud tools to biopharma for drug discovery/target ID, with revenue from subscriptions (ratable) or one-offs (upon delivery)—growth accelerates via network effects, as Genomics volumes expand the dataset, hitting 38% YoY in FY2025 amid $150M+ quarterly bookings, non-obviously turning fixed lab costs into recurring high-margin (~75%) revenue with minimal incremental COGS.[1]
- FY2025: ~$250M+ implied (78%+ of Data segment, based on 2024 split and growth); drove 37.6% of Data Q3 growth; NRR 126%; examples: $66M/4yr biotech, $45M study collab.[3]
- Economics: Multi-year deals (e.g., AZ $200M/3yr); TCV expansion outpaces revenue; gross margin 73.3% non-GAAP FY2025.
Entrants must bootstrap datasets without Tempus's 7,500+ oncologist network—Insights' 126% NRR implies pricing power from exclusivity, where competitors face commoditized data at lower retention.[1]

**Overall Revenue Model & Growth Drivers: Tempus' flywheel links Genomics (75% FY2025 mix, volume/reimbursement-led) to Data/AI (25%, high-margin recurring), where tests generate proprietary data fueling Insights licensing and TIME/Algos—FY2025 total $1.3B (83% YoY, 30% organic ex-Ambry), gross profit $798M (109% YoY), Adj. EBITDA -$7M (near breakeven); 2026 guide $1.59B (25% growth), $65M EBITDA, as ASPs rise (Oncology >$2,200 path) and Data TCV converts.[2]
- Q1-Q3 2025 Genomics: $688.5M; Data: $216M; TIME Q3: $9.2M.[5]
- Drivers: FDA clearances (xF/xR PMA pending), MRD reimbursement, pharmas (GSK/Pfizer), 29% oncology volume.
To compete, focus on niche data (e.g., rare diseases) or partnerships—Tempus's end-to-end moat (lab-to-AI) yields 65%+ blended margins at scale, vs. pure-play diagnostics' 50% cap.[1]

**Key Products & Pricing Economics: xT CDx solidifies Genomics leadership via FDA reimbursement premium ($4,500 vs. LDT $2,900), enabling 30% volume migration and >$500 ASP uplift; xF liquid biopsy pairs with tissue for 9% unique ctDNA findings; TIME matches 40k+ patients via AI on real-time data, revenue on enrollment (~$9M Q3); bundled Algos (HRD/TO, >123k ordered) drive upsell without separate billing yet.[1][4]
- Pricing: Oncology NGS ASP $1,510 FY2025; Hereditary $790; ECG-AF $128 CPT; Data licenses multi-year (e.g., $200M/3yr).
New products face reimbursement hurdles (1-2yr delays)—Tempus accelerates via PMA/ADLT, turning regulatory wins into 20%+ ASP growth non-obviously.[1]

**Confidence & Gaps: High confidence in FY2025 figures from earnings releases/decks (verified across Qs); medium on sub-Data splits (2024 detailed in 10-K, 2025 proportional); AI/Insights/TIME estimates derived (low-single-digit % total for AI). Additional 10-K (post-Feb 2026) would confirm FY2025 breakdowns; no material discrepancies vs. training data.[4]

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Recent Findings Supplement (March 2026)

Genomics Segment (Next-Generation Sequencing, Liquid Biopsy, Genetic Testing)

Tempus AI's Genomics—now rebranded Diagnostics in recent reporting—powers its flywheel by running high-volume tests like xT CDx (648-gene tumor profiling) and xF liquid biopsy, generating proprietary multimodal data that feeds the higher-margin Data business; in Q4 2025, oncology volumes surged 29% YoY to 340,500 tests at an ASP of ~$1,640 (up $40 QoQ), with ~$200 uplift expected from full xT CDx FDA migration by end-2026 (LDT $2,900 to CDx $4,500), plus $230 from xF clearance and $150+ from coverage expansions targeting >$2,200 ASP.[1][2][3]
• Q4 2025 revenue: $266.9M (+121.6% YoY); FY2025: $955.4M (+111.5% YoY), with oncology +26% and hereditary +29% volumes (125,000 tests, ASP $800); MRD tests hit 4,700 (+56% QoQ).[4][3]
• Non-GAAP gross margin: 62.2% in Q4 (up from 49.6% YoY), reflecting scale and mix shift to higher-ASP tests post-Ambry acquisition.[2]
For competitors entering genomics, Tempus' data flywheel creates a moat—replicating 450+ petabytes of linked clinical/molecular data is infeasible without equivalent testing scale, making pure-play sequencers vulnerable on pricing (~30-40% margins vs. Tempus' 60%+).

Data & Services / AI Segment (Dataset Licensing, AI Apps to Pharma/Hospitals)

Tempus monetizes its de-identified dataset (8M+ records, 400+ petabytes) via Insights licensing to 19/20 top pharmas (e.g., AZ $200M/3yrs, GSK $70M/3yrs), where AI tools like Lens platform and foundation models enable drug discovery/trial design; Q4 2025 Insights revenue jumped 69.5% YoY (ex-prior AZ warrant), backed by >$1.1B TCV and 126% NRR, with multi-year deals converting steadily (Q4 historically strongest).[3][5]
• Q4 2025 revenue: $100.4M (+25.1% YoY); FY2025: $316.4M (+30.9% YoY), ~24% of total (up from prior years).[3]
• Non-GAAP gross margin: 74.5% Q4 (software-like, down slightly YoY from foundation model compute); includes apps like TIME (trial matching) and Next (care gaps).[1]
New entrants face near-insurmountable data barriers—Tempus' longitudinal multimodal library (genomics + imaging + clinical) yields 37-69% Insights growth, while rivals lack the "sensor" (testing volume) to build comparable assets.

Emerging Insights Division (High-Margin Data Licensing Core)

Insights has accelerated as Tempus' crown jewel within Data & Services, licensing AI-curated datasets for pharma R&D (e.g., Recursion, Pathos); FY2025 growth hit 38% on $150M Q3 bookings alone (+multi-year Lens expansions, $45M study collab), with TCV ballooning to >$1.1B by YE2025—visibility implies 40%+ Q1 2026 growth, subsidizing diagnostics via 70%+ margins.[4][6]
• Explicitly called out as "having a moment," comprising bulk of Data revenue; NRR 126% signals sticky multi-year pharmas expanding usage.[5]
• Paige Predict launch (Jan 2026) adds AI pathology (123 biomarkers/16 cancers from H&E slides), enhancing dataset for future licensing.[2]
To compete, others must aggregate equivalent data at scale—Tempus' 5,500+ hospital links and 7.5M+ slides (post-Paige) lock in pharmas, turning commoditized data into defensible AI moat.

Q4/FY2025 Financial Snapshot & Regulatory Catalysts

Tempus hit FY2025 total revenue of $1.3B (+83.4% YoY, beating $1.265B guide), with Q4 $367.2M (+83% YoY, organic 33.5% ex-Ambry); Adjusted EBITDA turned positive at $12.9M Q4 / ($7.4M) FY (post-acquisitions). xF liquid biopsy FDA submitted (minimal 2026 ASP impact, ramps 2027); xT CDx at 30%+ volume, majority by end-2026 for reimbursement uplift; xR 510(k) cleared Q3.[3][1]
• 2026 guide: $1.59B revenue (+25%), $65M Adj. EBITDA—sustains diagnostics volumes + data pull-forward.[3]
Rivals chasing regulatory parity (e.g., FDA PMA/NCD) face Tempus' first-mover scale; without it, ASP stays capped at LDT levels.

Growth Economics & Competitive Implications

Tempus' segments interlock—Genomics volumes (217k Q3 tests, 33% YoY) fuel Data flywheel, yielding 73%+ margins vs. Genomics' 60%; FY2025 gross profit $797.9M (+109%), cash $759.7M supports AI compute/regulatory pushes (e.g., foundation models Q1 2026). No major policy changes noted, but ARPA-H CRO award (Oct 2025) boosts hereditary.[3]
• Confidence: High on figures (direct from releases/transcripts); estimates consistent across sources (e.g., $1.27-1.3B FY total).
New players must bootstrap data via loss-leader testing—Tempus' $2B+ Data contracts and 25% 2026 guide (post-83% ramp) signal maturing economics, pressuring incumbents without AI/data integration.