10-K: Tempus AI Reports Soaring Revenue, Reduced Losses in 2025

Tempus AI, Inc. announced a significant increase in total revenue to $1.27 billion in 2025, alongside a substantial reduction in net losses and improved adjusted EBITDA, driven by strategic acquisitions and strong growth in its Diagnostics and Data and applications product lines.

Summary

• Total net revenue increased by 83% to $1.27 billion for the year ended December 31, 2025, up from $693.4 million in 2024.
• Diagnostics revenue surged by 111% to $955.4 million in 2025, primarily due to the acquisition of Ambry Genetics and increased oncology test volumes.
• Data and applications revenue grew by 31% to $316.4 million in 2025, driven by increased demand for Insights products and new customer adoption.
• Net loss significantly decreased to $245.0 million in 2025, compared to $705.8 million in 2024.
• Adjusted EBITDA improved from a loss of $104.7 million in 2024 to a loss of $7.4 million in 2025, nearing profitability on an adjusted basis.
• The company completed several key acquisitions in 2025, including Ambry Genetics Corporation ($692.3 million), Paige.AI, Inc. ($101.5 million), Deep 6 AI, Inc. ($17.4 million), and OneOme, Inc.
• Issued $750.0 million in 0.75% Convertible Senior Notes due 2030 in July 2025, with net proceeds of $725.7 million.
• Repaid $293.5 million of Term Loan Facilities using proceeds from the Convertible Senior Notes.
• Entered into a Controlled Equity Offering (ATM) to sell up to $500.0 million of Class A common stock, selling 2,381,895 shares for $195.5 million net proceeds in 2025.
• Extended the maturity date of the convertible promissory note with Google LLC from March 2026 to December 2030.
• Average reimbursement for oncology NGS tests increased to approximately $1,600 in 2025 from $1,510 in 2024.
• Average reimbursement for hereditary NGS tests was approximately $770 in 2025.
• The FDA's final rule attempting to regulate Laboratory Developed Tests (LDTs) as medical devices was vacated by a federal district court in March 2025, which is favorable for the company's LDT operations.
• Clinical oncology volume rose to approximately 340,500 samples in 2025, and hereditary testing added 460,500 tests in 2025 due to the Ambry acquisition.
• The company's database now includes approximately 1.4 billion documents across more than 8.6 million de-identified patient records, with over 1.5 million records linked with genomic information.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive report, reflecting significant revenue growth, substantial reduction in losses, and strategic expansion through acquisitions and partnerships. While the company still incurs net losses and faces legal/regulatory risks, the operational improvements and market traction are highly encouraging for future prospects.

Positives

• Achieved substantial revenue growth of 83% year-over-year, reaching $1.27 billion in 2025.
• Significantly reduced net loss from $705.8 million in 2024 to $245.0 million in 2025.
• Adjusted EBITDA improved dramatically from a loss of $104.7 million in 2024 to a loss of $7.4 million in 2025, indicating strong operational leverage and progress towards profitability.
• Strategic acquisitions of Ambry Genetics, Paige.AI, Deep 6 AI, and OneOme expanded product offerings, disease areas (pediatrics, rare disease, cardiology, reproductive health, immunology, digital pathology), and data assets.
• Increased average reimbursement for oncology NGS tests to $1,600 in 2025, driven by higher Medicare rates.
• FDA approval of the xT CDX assay in April 2023 and its Advanced Diagnostic Laboratory Test (ADLT) status from CMS effective July 1, 2024, enhance reimbursement prospects.
• Clinical trial site activation through the TIME Trial program averages approximately 10 days in 2025, significantly faster than the industry average of 6-12 months.
• The company's multimodal database has grown exponentially, now encompassing 8.6 million de-identified patient records and 1.6 billion pages of clinical text, providing a strong foundation for AI development.
• The federal court's invalidation of the FDA's rule to regulate LDTs as medical devices reduces immediate regulatory burden on the company's LDT operations.
• Strong customer retention rate of 87% for physicians ordering more than 5 oncology NGS tests.

Negatives

• Continued to incur significant net losses of $245.0 million in 2025, and an accumulated deficit of $2.4 billion since inception.
• Reliance on a limited number of suppliers, particularly Illumina Inc. for sequencers and reagents, poses supply chain risks.
• The Applications product line is nascent, contributing only 1.6% of total revenue in 2025, and its future success is speculative.
• Significant debt burden of $1.3 billion as of December 31, 2025, including convertible senior notes and credit facilities, which may limit operational flexibility.
• Ongoing legal proceedings, including patent infringement lawsuits from Guardant Health, Inc. and a class-action lawsuit alleging Illinois Genetic Information Privacy Act violations, could result in substantial costs and reputational harm.
• The dual-class stock structure concentrates voting control with the Chief Executive Officer, limiting the influence of other stockholders.
• The market price of Class A common stock has been highly volatile since its IPO in June 2024, ranging from $22.89 to $103.25 per share.
• Uncertainty in the evolving regulatory landscape for AI technologies and LDTs could impose additional costs or limit adoption.
• A significant portion of Data and applications revenue is derived from a limited number of customers, posing concentration risk.
• The company's research and development strategy emphasizes rapid innovation and advancement of successful hires who may not have prior industry expertise, which could lead to unintended outcomes or poorly received decisions.

Risks

• Incurring significant losses and potentially failing to achieve or maintain profitability.
• Failure of current or future products to achieve or maintain sufficient commercial market acceptance.
• Operating results may fluctuate significantly, making future results difficult to predict and potentially falling below expectations.
• Dependence on continued access to, and ability to monetize, de-identified patient data, subject to evolving laws and contractual restrictions.
• Limited operating history and rapid growth make future prospects and challenges difficult to evaluate.
• Need to raise additional capital in the future, potentially leading to stockholder dilution or restrictive debt covenants.
• The nascent Applications product line may not be successful in development or commercialization, or achieve market acceptance.
• Diagnostic products, or competitors' products, could have defects or errors, leading to reputational harm and legal liability.
• Inadequate coverage or reimbursement from third-party payers for tests could negatively affect financial results.
• Inability to obtain or maintain adequate reimbursement for Diagnostics product line outside the U.S. could compromise international expansion.
• Labor relations matters, including unionization efforts, could adversely affect business, reputation, and financial condition.
• Use of AI in products and services may result in operational challenges, legal liability (e.g., intellectual property infringement, data privacy), reputational concerns, and competitive risks.
• Inability to compete successfully with numerous competitors in diagnostics and healthcare data markets.
• Rapid changes in the healthcare diagnostic and data industries could render the Platform and products obsolete.
• Existing and future debt obligations may affect operational flexibility and ability to satisfy obligations.
• Reliance on a limited number of sole suppliers for laboratory instruments and materials poses supply chain risks.
• International expansion exposes the company to business, regulatory, political, operational, financial, and economic risks.
• Subject to stringent and evolving U.S. and foreign data privacy and security laws, with potential for regulatory investigations, litigation, fines, and business disruptions.
• Changes in healthcare laws, regulations, and policies could increase costs, decrease sales, and negatively impact reimbursement.
• Future changes in FDA enforcement discretion for Laboratory Developed Tests (LDTs) could impose significant regulatory requirements.
• Failure to obtain or maintain necessary regulatory clearances, approvals, or certifications for products in the U.S. and foreign jurisdictions.
• Products may be subject to recalls, leading to adverse impact on reputation and financial results.
• Research use only (RUO) and investigational use only (IUO) products could become subject to more onerous regulation.
• Liability claims for product or professional liability could exceed insurance coverage.
• Dependence on information technology systems, including cloud providers, makes the company vulnerable to service interruptions or failures.
• Cyber-attacks, security breaches, or data compromises could lead to regulatory actions, litigation, fines, and reputational harm.
• The dual-class stock structure concentrates voting control with the CEO, limiting other stockholders' influence.
• Volatility in the Class A common stock price.
• Potential limitations on the use of net operating loss carryforwards and other tax attributes.
• Reliance on key members of senior management, and the loss or incapacity of these individuals could adversely affect operations.
• Potential for officers, directors, and principal stockholders to pursue corporate opportunities independent of the company, creating conflicts of interest.

Future Outlook

The company expects to maintain high levels of investment in product innovation, including new laboratory assays, algorithm development, and expansion into new disease areas. It plans to continue investing in technology to improve user experience and data processing efficiency. The company anticipates continued efforts to improve average reimbursement rates through clinical studies, regulatory approvals, and additional lab locations. It also expects selling, general, and administrative expenses to increase in absolute dollars due to headcount and public company costs, but decrease modestly as a percentage of revenue in the long term. The company's strategy involves leveraging its Platform to identify, develop, and commercialize genomic and algorithmic tests beyond its current portfolio, and expanding its Data and applications business by growing customer relationships and providing relevant data for drug discovery and clinical trials.

Management Comments

• Management believes Intelligent Diagnostics, leveraging AI, including generative and agentic AI, represent the future of precision medicine, informing more personalized and data-driven therapy selection and development.
• Management aims to help physicians find the best therapies for their patients, help pharmaceutical and biotechnology companies make the best drugs possible, and enable patient access to emerging therapies and clinical trials when appropriate.
• Management believes the company's unique data set enables it to bring the benefits of generative AI and large language models to healthcare, using its curated, multimodal database as a proprietary training set.
• Management believes the interrelated nature of its two product lines (Diagnostics and Data and applications) is unique, creating network effects and enhancing competitive advantage as more data makes tests smarter and the database more valuable.
• Management believes the company's ability to launch Algos at scale is a key differentiator of its Platform, representing a significant long-term opportunity.

Industry Context

StockSavvy.ai notes that Tempus AI's strong revenue growth and strategic acquisitions align with the broader industry trend of integrating artificial intelligence and big data into healthcare, particularly in precision medicine and diagnostics. The company's focus on multimodal data and AI-driven 'Intelligent Diagnostics' positions it at the forefront of a rapidly evolving sector. The expansion into hereditary testing through Ambry Genetics and digital pathology via Paige.AI reflects a move towards comprehensive diagnostic solutions, mirroring a wider industry push for integrated patient profiles. The rapid clinical trial site activation achieved by Tempus AI significantly outperforms industry averages, indicating a potential disruptive force in pharmaceutical R&D. However, the industry also faces increasing scrutiny over data privacy, AI ethics, and regulatory frameworks, which Tempus AI acknowledges as ongoing risks. Competitors like Foundation Medicine, Caris Life Sciences, Guardant Health, and various CROs are also active in these areas, highlighting the intense competitive landscape.

Comparison to Industry Standards

• The company's average turnaround time for xT assays (approximately nine days) and xF assays (approximately eight days) meets or exceeds many competitors in the NGS space who have been operating longer.
• Activation of new clinical trial sites through the TIME Trial program takes approximately 10 days on average in 2025, significantly faster than the third-party research suggestion of 6-12 months for initiating a new trial site in the United States.

Management Changes

Corporate Governance

Legal Proceedings

• Subpoena received from the Office of the Ohio Attorney General on May 19, 2022, requesting billing and patient records for nine Ohio Medicaid patients (responsive documents provided, no additional inquiry since June 2022).
• Civil Investigative Demand (CID) received from the U.S. Attorney's Office for the Eastern District of New York on March 4, 2024, requesting documents related to False Claims Act, Anti-Kickback statute, and Medicare 14-Day Rule compliance (ongoing production of documents).
• Patent infringement complaint filed by Guardant Health Inc. on June 11, 2024, alleging infringement of five U.S. patents by Tempus xF, xF+, xM Monitor, and xM MRD products (seeking injunctive relief, monetary damages, future royalty, costs, and fees).
• Declaratory Judgment sought by Guardant Health Inc. on January 17, 2025, regarding the veracity of its advertisements about company products.
• Tempus filed multiple counterclaims against Guardant on March 14, 2025, under the Lanham Act and related state statutes, alleging false and misleading advertisements.
• Tempus filed a separate patent infringement complaint against Guardant in the U.S. District Court for the Southern District of California, alleging infringement of four U.S. patents by certain Guardant products.
• Guardant filed another complaint against Tempus on August 12, 2025, alleging infringement of three U.S. patents by Tempus's xM tests (consolidated with existing Delaware case).
• Federal securities class-action lawsuit (Shouse v. Tempus AI, Inc. et al.) filed on June 12, 2025, against the company, CEO, and CFO (voluntarily dismissed by lead plaintiff on November 17, 2025).
• Two derivative lawsuits based on the same facts as the Shouse case were also voluntarily dismissed.
• Class-action lawsuit filed on February 12, 2026, alleging violations of the Illinois Genetic Information Privacy Act (company intends to vigorously defend).

Related Party Transactions

• Eric Lefkofsky, CEO, Founder, and Chairman, is also a co-founder and Executive Chairman of Pathos AI, Inc., with whom Tempus has commercial agreements.
• Master Agreement with Pathos AI, Inc. (Amended and Restated Master Agreement) for drug development commercialization efforts, including a warrant to purchase Pathos equity.
• Order Form with Pathos AI, Inc. (Pathos Master Agreement) in April 2025 for the development of a foundation large multimodal model in oncology, licensing de-identified data to Pathos for $200 million over three years (including $50 million upfront payment), and Tempus receiving a license to use the Foundation Model.
• Tempus will pay Pathos $35 million for its commitments under the Pathos Master Agreement, with $25 million paid to date.
• Pathos may pay up to 50% of data license fees in shares of Pathos Series D Preferred Stock.
• Tempus provides a secure cloud environment for the Foundation Model, with Pathos paying the first $60 million of cloud compute costs.
• Ryan Fukushima, Chief Executive Officer, Data, is a co-Founder of Pathos AI, Inc. and devotes some professional time to Pathos.
• Independent Contractor Agreement with Iker Huerga, CEO of Pathos, in February 2026, for assistance with a new commercial agreement, compensated with RSUs and PSUs.
• Convertible promissory note with Google LLC, amended in February 2025, with principal reductions based on Google Cloud Platform services used by Tempus.

Stakeholder Impact

• Shareholders: Potential for increased value due to strong revenue growth and reduced losses, but also dilution from capital raises (ATM, convertible notes) and volatility in stock price. Concentrated voting control with the CEO limits influence.
• Employees: Unionization efforts for some laboratory employees and potential for further unionization could impact labor costs and operations. Management changes at the CEO level for Data and Diagnostics roles may affect organizational structure and strategy.
• Customers (Healthcare Providers): Benefit from Intelligent Diagnostics, faster clinical trial matching, and expanded testing capabilities through acquisitions, potentially leading to improved patient care. However, evolving regulatory landscape for LDTs and AI could impact product availability or cost.
• Customers (Life Sciences Companies): Benefit from access to large, multimodal de-identified datasets, clinical trial support, and algorithmic development services. Increased demand for Insights products indicates value. However, potential for foundation models to reduce demand for direct data licensing in the long term.
• Creditors: The company's substantial debt ($1.3 billion) and ongoing losses, despite improvement, present a risk, though current liquidity is deemed sufficient for the next 12 months. Compliance with debt covenants is crucial.
• Regulatory Authorities: Ongoing scrutiny and investigations (Ohio AG, NY CID) highlight the complex regulatory environment. The company's compliance efforts are critical to avoid penalties and operational disruptions.

Next Steps

• Continue to invest in product innovation, including new laboratory assays and algorithm development.
• Expand the Platform into new disease areas beyond oncology, neuropsychiatry, and cardiology.
• Further develop and scale the technology infrastructure to support increasing data volumes and user experience.
• Pursue regulatory approvals for additional assays and algorithmic diagnostics.
• Increase sales and marketing efforts to drive market adoption of current and future products.
• Continue efforts to improve payer coverage and reimbursement rates for diagnostic tests.
• Manage and integrate recently acquired businesses (Ambry, Paige, Deep 6, OneOme) to realize anticipated benefits.
• Monitor and respond to evolving legal and regulatory landscapes concerning AI and data privacy.

Key Dates

Recommendation

Tempus AI's 2025 performance demonstrates robust growth, with an 83% increase in total revenue and a significant reduction in net losses, bringing adjusted EBITDA close to profitability. Strategic acquisitions have expanded its market reach and product portfolio, particularly in high-growth areas like hereditary testing and digital pathology. The company's innovative AI-driven platform and efficient clinical trial matching capabilities are strong competitive advantages. While substantial debt and ongoing legal/regulatory challenges present risks, the strong operational momentum and clear path towards profitability make it an attractive 'buy' for growth-oriented investors, with careful monitoring of execution and risk mitigation strategies.

Keywords

Intelligent Diagnostics, Artificial Intelligence in Healthcare, Genomic Sequencing, Precision Medicine, Oncology Diagnostics, Hereditary Testing, Data Analytics, Clinical Trials, AI Algorithms, Digital Pathology, Biotechnology, Pharmaceuticals, SEC Filing, 10-K, Tempus AI