In This Article:
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Revenue Growth: Accelerated to 35.8% year over year in Q4.
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Gross Profit Growth: Increased by 49.7% in Q4.
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Total Remaining Contract Value: Ended the year at $940 million.
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Net Revenue Retention: Achieved 140%.
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Revenue Guidance for 2025: Increased from $1.23 billion to $1.24 billion.
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Adjusted EBITDA for 2025: Expected to be approximately $5 million.
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Acquisition: Closed the acquisition of Ambry Genetics on February 3.
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Google Agreement: Extended for another five years.
Release Date: February 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tempus AI Inc (NASDAQ:TEM) reported a 35.8% year-over-year revenue growth in Q4 2024, with gross profit growth accelerating to 49.7%.
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The company ended the year with $940 million in total remaining contract value and a 140% net revenue retention rate, indicating strong customer retention and future revenue potential.
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Tempus AI Inc (NASDAQ:TEM) successfully closed the acquisition of Ambry Genetics, which is expected to contribute positively to the company's financials.
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The company increased its revenue guidance for 2025 from $1.23 billion to $1.24 billion and expects to generate about $5 million of adjusted EBITDA.
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Tempus AI Inc (NASDAQ:TEM) extended its agreement with Google for another five years, securing best-in-class rates and providing financial flexibility.
Negative Points
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The timing of data delivery projects can be unpredictable, with a significant $10 million data delivery slipping out of Q4, affecting quarterly revenue.
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Ambry Genetics' growth rate is expected to slow down to the high-10s in 2025 due to lapping of previous accelerants, such as ASP headwinds.
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The total remaining contract value has been relatively stable in the low $900 million range, which may not fully reflect future revenue growth potential.
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The company faces seasonality challenges, with Q1 typically being the lowest revenue quarter due to holiday slowdowns.
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There are no significant synergies expected from the Ambry acquisition in 2025, as the company plans to run Ambry as a standalone business initially.
Q & A Highlights
Q: Eric, could you elaborate on the benefits of acquiring Ambry Genetics and the timeline for integrating somatic workflows into the West Coast lab? A: Eric Lefkofsky, CEO, explained that acquiring Ambry provides Tempus with a West Coast lab, complementing existing labs in Chicago, Raleigh, and Atlanta. While there are no immediate plans to integrate somatic workflows, the acquisition offers redundancy and operational flexibility. Over the next year or two, Tempus plans to move some assays and cross-pollinate between labs to enhance operational efficiency.