Q2 2024 Tempus AI Inc Earnings Call

August 6, 2024

Operator: Thank you for standing by. I am Augusto, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Ms. Liz Krutoholow, Vice President of Investor Relations. Please go ahead.

Thank you for standing by I am Ugly stand out it'd be a conference operator today at this time I would like to welcome everyone to the second quiet Gateway and Atlantic wiping out the rest of the country and Scott.

Speaker Change: All lines have been placed in it to prevent any background nice after the Speakers' remarks, there will be a question and answer session.

Betsy Gunderson: If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you wish Vijay your question breast I want to again. Thank you I would now like to turn the call I'll bet to me. These good low base Investor Relations. Please go ahead.

Liz Krutoholow: Thank you. Good afternoon and welcome to Tempus's Q2 2024 Conference Call. This afternoon, Tempus released results for the quarter ended 30 June 2024. Joining me today from Tempus are Eric Lefkofsky, Founder and CEO of Tempus, and Jim Rogers, CFO. Before we begin, I would like to remind you that during this call, management may make forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please visit our 10-Q for the quarter ended 30 June 2024, filed on 6 August 2024, as well as any future reports that we file with the SEC. During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Speaker Change: Thank you good afternoon, and welcome to the second quarter 'twenty 'twenty four conference call.

Operator: Thank you. Good afternoon, and welcome to TEMPUS' second... This afternoon, Campus Resilience. Joining me today from Tempus are Eric Lepofsky, founder and... Before we begin, I would like to remind you that during this call, management may make forward-looking statements that are subject to risks and uncertainties that could cause actual results. For a discussion of these risks, please visit our 10Q for the quarter ended June 30th. During the call, we will discuss non-GAAP financial measures which are not prepared in accordance with generally accepted standards.

Speaker Change: This afternoon.

Speaker Change: The results for the quarter ended June 30th.

Speaker Change: Joining me today are Eric Lukowski founder and CEO.

Jim Rogers: And Jim Rogers.

Speaker Change: Before we begin I would like to remind you that during this call management may make forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially or.

Speaker Change: For a discussion of these risks please visit our 10-Q for the.

Speaker Change: The quarter ended June 30th.

Speaker Change: Four filed on August 620, 24, as well as any future reports that we file with SEC.

Speaker Change: During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Liz Krutoholow: Definitions of these non-GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial measures, are included in our Q2 earnings release, which has been furnished to the SEC and is available on our website at investors.tempus.com. I would now like to turn the call over to Eric.

Speaker Change: Of these non-GAAP financial measures along with reconciliations to the most directly comparable GAAP financial measures.

Speaker Change: We did our second quarter earnings release, which has been furnished to the SEC and is available on our website at investors.

Speaker Change: Uh huh.

Speaker Change: I would now like to turn the call over there.

Operator: Definitions of these non-GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial models, are included in our second quarter earnings release, which has been furnished to the SEC and is available on our website at investors.tempus.gov. I would now like to turn the call over to you. First, I would like to welcome everybody.

Eric Lefkofsky: First, welcome everybody to our first earnings call as a public company. We're excited to be here and happy to answer some questions. I'll just maybe for 30 seconds give some color. Q2 is a strong quarter. As we provided some additional insight in our overview letter, our core businesses remain on track. Everything is just how you wanna see it up and to the right. We're executing as we had intended both when we began this process a few months ago, going public and then certainly carrying into the quarter. I would say that we feel like we're in good shape and happy to answer any questions that people have. Operator, we can open the line for questions, please.

Speaker Change: First of all welcome everybody.

Eric Lepofsky: to our first earnings call as a public company. We're excited to be here and happy to answer questions. I'll just, maybe, for 30 seconds, give you some color.

Speaker Change: Our first earnings call as a public company, we're excited to be here and happy to answer.

Speaker Change: Questions I'll, just maybe for 30 seconds to give some color Q2 was a strong quarter.

Eric Lepofsky: Q2 is a strong quarter. As we provided some additional insight in our overview letter, our core businesses remain on track, everything is how you want to see it up to the right, and we're executing as we had intended both. We began the process a few months ago by going public and then certainly carrying it to the corridors. So I would say that we feel like we're in good shape and happy to answer any questions that people have.

As we provided some additional insight into our overview letter our core businesses remain on track everything.

Speaker Change: It's how you want to see it up into the right.

Speaker Change: And executing.

Speaker Change: Executing as we had.

Speaker Change: Impendent both.

Speaker Change: We began the process a few months ago going public and then certainly carried into the quarter. So I would say that.

Speaker Change: We feel like we're in good shape and happy to answer any questions that people have.

Operator: Operator, we can open the line for questions.

Speaker Change: Operator, we can open the line for questions. Please.

Operator: Well, at this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We will pause for just a moment to compile our Q&A roster. For our first question, Tejas Savant with Morgan Stanley, please go ahead.

Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number 1 on your telephone keypad. We will pause for just a moment to compile our Q&A roster for our first quest. There has been a quarrel with Morgan Stanley. Please go ahead.

Speaker Change: At this time I would like to remind everyone in order to ask.

Speaker Change: A question Press Star then the number one on your telephone keypad.

Speaker Change: Lastly, just a moment to compile the Q&A plastics.

Speaker Change: First question, that's about with Morgan Stanley. Please go ahead.

Analyst from Morgan Stanley: Hey, guys. Good evening, and congrats on a good start out of the gate for COASST IPO. Eric, maybe you or Jim can chime in on this.

Tejas Savant: Hey, guys. Good evening, and congrats on a good start out of the gate post-IPO. Eric, maybe you or Jim can chime in on this. You know, nice progress on ASPs here on the genomic side in the quarter. Can you just walk us through how you're thinking about potential ASP upside in the back half of the year? You've got the ADLT rate on xT coming through as well, but any color on how much of that is baked in versus progress in the commercial payer front would be great. Thank you.

Speaker Change: Hey, guys good evening and congrats on a good start out of the gate post IPO.

Eric Lukowski: Eric maybe.

Speaker Change: You or Jim can chime in on this.

Eric Lepofsky: You know, nice progress on ASPs here on the genomic side in the quarter. Can you just walk us through how you're thinking about potentially STFs upside in the back half of the year? You've got the ADLT rate on XT coming through as well. But any color on how much of that is baked in versus progress on the commercial payer front would be great. Thank you.

Speaker Change: This progress on <unk> on the on the genomics side in the quarter can you just walk us through how youre thinking about potentially Sds upside in the back half of the year you've got the <unk>.

Speaker Change: <unk> read on XD coming through as well, but any color on how much of that is baked in versus progress on the commercial payer front would be great. Thank you.

Eric Lepofsky: I'll start by covering just the core genomics business volumes that Jim can talk a little bit about on the reimbursement side. I think in terms of the overall strength of our units and unit growth. As we covered in our overview letter, we feel like we're completely on track. We delivered roughly 4,000 more tests in the quarter in Q2 over Q1. We expect that trend to continue. And there's obviously some kind of percentage seasonality in the growth rate, so you could have fewer days in the quarter, or ASCO, depending on when it falls, could have some impact.

Eric Lefkofsky: I'll start by covering just the core genomics business volumes that Jim could talk a little bit about on the reimbursement side. I think in terms of the overall strength of our units and the unit growth, as we covered in our overview letter, we feel like we're completely on track. We delivered roughly 4,000 more tests in the quarter in Q2 over Q1. We expect that trend to continue. You know, there's obviously some kind of percentage seasonality of growth rate in that you could have fewer days in the quarter or ASCO, depending on when it falls, could have some impact. We feel like our core genomics business is performing as we expected.

Speaker Change: Well I'll start by covering just the core genomics business. The boys are Jim can talk a little bit about the.

Speaker Change: The reimbursement side I think in terms of the overall.

Speaker Change: The strength of all our units and the unit growth.

Speaker Change: We covered in our overview, we feel like we're completely on track.

Speaker Change: We delivered roughly 4000 more tests in the quarter in Q2 over Q1, we expect that trend to continue.

Speaker Change: And there's obviously some some kind of percentage seasonality of growth rate did that you could have fewer days in the quarter were asked where depending on where it falls could have some impact but.

Eric Lepofsky: But we feel like our core genomics business is performing as we expected. We feel like we can be in that 25% to 30% growth range in terms of units. And given our size and scale, at this point, it's certainly one of the largest therapy selection sequencers that are out there. We feel like that's a really healthy place to be, and in terms of ASP and reimbursement.

Speaker Change: But we feel like our.

Speaker Change: Our core genomics business is performing as we expected.

Eric Lefkofsky: We feel like we can be in that 25% to 30% growth range in terms of units. Given our size and scale at this point is certainly one of the largest therapy selection sequencers that are out there, we feel like that's a really healthy place to be. In terms of ASP and reimbursement, I'll turn it to Jim.

Speaker Change: We feel what we can be in that 25% to 30% growth range in terms of units and given our size and scale. At this point is certainly one of the largest therapy selection sequences that are out there.

Speaker Change: We feel like that's a really healthy place to be and in terms of ASP and the reimbursable for Jim.

Jim: Yeah, thanks for the question. So our average reimbursement in Q2 was about $1,500, an increase of about $50 over where it was at in Q1 of 2024. The biggest drivers in kind of that uplift were a slight makeshift to more Medicare and Medicare Advantage patients than was typically the average rate that we duplicated from commercial payers. That reminder, we're primarily network providers with commercial payers, so average reimbursement is significantly lower than what we've received from Medicare.

Jim Rogers: Yeah. Thanks, Tejas, for the question. So our average reimbursement in Q2 was about $1,500, an increase of about $50 over where it was at in Q1 of 2024. The biggest drivers in kind of that uplift were a slight mix shift to more Medicare Advantage, patients, which typically get reimbursed at a higher rate than we get from commercial payers. As a reminder, we're primarily an out-of-network provider with commercial payers, so average reimbursement is significantly lower than what we've received from Medicare. This presents an opportunity for us going forward as we negotiate with those payers to cover kind of the various tests that we have in market. Tejas, you also mentioned kind of the ADLT status for our xT CDx assay, which is our FDA-approved version of xT.

Speaker Change: Thanks, Hey, Josh with Watson.

Jim Rogers: Average reimbursement in Q2 was about $500 an increase of about $50 over where it was at Q1 of 'twenty four.

Jim Rogers: The biggest driver that kind of that upper.

Speaker Change: Lift were a slight mix shift to more Medicare or Medicare advantage patients, which typically get reimbursed at a higher rate than we get from commercial payers.

Jim Rogers: As a reminder, we're primarily to out of network provider.

Jim Rogers: With commercial Payors, so average reimbursement is.

Jim Rogers: Significantly lower than what we received for Medicare. This presents an opportunity for us going forward as we negotiate with both payer to cover kind of the various tests that we havent market.

Jim: This presents an opportunity for us going forward as we negotiate with those payers to cover kind of the various tests that we have in March. You also mentioned the ADLT status for our xtcdx assay, which is our FDA-approved version of xt. The initial price there was set at $4,500, but that pricing process will play out over the back half of this year. So there won't be a meaningful impact on ASPs in 2024 as it relates to the FDA-approved version. But as we start to migrate volume to that version of the assay in early 2025,

Jeff: Hey, Jeff you also mentioned kind of the <unk> status for our <unk> assay, which is our FDA approved version of X T. The initial price there was set at $4500, but that pricing process will play out over the back half of this year. So there won't be a meaningful impact asps at 2024 as it relates to the FDA approved version of it but as we saw.

Jim Rogers: The initial price there was set at $4,500, but that pricing process will play out over the back half of this year. There won't be a meaningful impact to ASPs in 2024 as it relates to the FDA-approved version. As we start to migrate volume to that version of the assay in early 2025, we should see some additional tailwinds.

Jim Rogers: To migrate.

Jim Rogers: Volume to that.

Jim Rogers: Version of the assay in early 2025.

Jim Rogers: Sure.

Analyst from Morgan Stanley: Got it. That's helpful. And then guys, I just want to dig in a little bit on the MRD launcher. Any anecdotal, you know, early customer feedback you can share? Any sort of differences you'd like to call out in the reception for, you know, the Tumor Naive version versus Next Personal at this stage? And how are you thinking about volume contributions from MRD in the back half of the year? And then is reimbursement essentially a back half 2025 dynamic, or could it happen sooner than that?

Tejas Savant: Got it. That's helpful. Guys, just wanna dig in a little bit on the MRD launcher. Any anecdotal, you know, early customer feedback you can share, any sort of like differences you'd like to call out in the reception for, you know, the tumor-naive version versus NeXT Personal at this stage? How are you thinking about volume contributions from MRD in the back half of the year? Is reimbursement essentially a back half 2025 dynamic, or could it happen sooner than that?

Speaker Change: Got it that's helpful and.

Speaker Change: And then guys just wanted to dig in a little bit on the Mardi lawn sure.

Speaker Change: Anecdotal early customer feedback you can share any sort of like differences you'd like to call out in the reception for the tumor naive version versus the exports. So at this stage and how are you thinking about volume contributions from Mardi in the back half of the year and then.

Speaker Change: <unk> spent essentially a back half 2025 dynamic or could it happen sooner than that.

Eric Lepofsky: Yeah, again, I'll cover the overall launch, and maybe Jim can cover some thoughts on reimbursement. So, we launched, for those who don't know, we launched basically our entire MRD platform at ASCO with a tumor-naive assay in colorectal cancer, and then, in partnership with Personalis, we brought a breast, lung, and I.O. to market as well with a tumor-informed assay. I think the response has been quite positive, even though we're both metering out volume at this point because if we kind of opened up the floodgates, you would likely have an enormous amount of volume that's not at the present moment. Given that it takes some time to get reimbursement, we're metering out accounts that we offer the assay to and ramping up slowly so that That said, everything we hear anecdotally is super positive.

Eric Lefkofsky: Yeah. Again, I'll cover the overall launch. Maybe Jim can cover some thoughts on reimbursement. We launched. For those who don't know, we launched basically our entire MRD platform at ASCO with a tumor-naive assay in colorectal cancer, and then in partnership with Personalis, we brought a breast, lung, and IO to market as well with a tumor-informed assay. I think the response has been quite positive, even though we're both metering out volume at this point, because if we kind of opened up the floodgates, you would likely have an enormous amount of volume that's, you know, at the present moment, not reimbursed.

Speaker Change: Yeah again I'll.

Speaker Change: Cover the overall launch and maybe Jim can cover some thoughts on reimbursement.

Speaker Change: So we.

Speaker Change: We launched for those who don't know we launched basically our entire <unk> platform.

Speaker Change: At <unk>, where the tumor naive assay in colorectal cancer and then in partnership with personality, we brought a breast lung and Io that's market as well with the tumor informed assay.

Speaker Change: The I think the response has been quite positive even though we are.

Speaker Change: Metering out volume at this point, because if we kind of opened up the floodgates you would likely have been enormous amounts of volume that you're at the present moment not reimbursed. So given that it takes some time to get reimbursement. We are metering out accounts that we offer the assay too.

Eric Lefkofsky: Given that it takes some time to get reimbursement, we're metering out accounts that we offer the assay to and ramping up slowly so that we can kind of, you know, manage the expense side of getting the tested market. That said, everything we hear anecdotally is super positive. I think, you know, as I mentioned to a bunch of folks, historically, tumor-naive has a place in the market given that logistically and administratively, it's just easier than tumor-informed for many accounts that can't do an additional biopsy or don't have enough tissue to basically run, you know, a second set of sequencing. It consumes a lot of tissue every time you sequence a patient.

Speaker Change: And wrapping up slowly so that we can kind of manage the expense side.

Speaker Change: The test market that said everything we hear anecdotally is super positive I think.

Jim: I think, you know, as I mentioned to a bunch of folks historically, tumor naive has a place in the market given that, logistically and administratively, it's just easier than tumor informed. For many accounts that can't do an additional biopsy or don't have enough tissue to basically run, you know, a second set of sequencing consumes a lot of tissue every time you sequence a patient, so if you've done therapy selection once, now you can do an MRD for, you know, an informed assay.

Speaker Change: Two as I've mentioned to a bunch of folks historically tumor naive as a.

Speaker Change: Placed in the market given that logistically it administratively it's just easier than tumor informed.

Speaker Change: For many accounts that can't do additional biopsy or don't have enough tissue to basically run a second set of sequencing consumes a lot of tissue every time you sequence of patients. So if you've done therapy selection one thing to do at <unk>.

Eric Lefkofsky: If you've done therapy selection once, now you have to do MRD for, you know, an informed assay, it can be logistically problematic. I think naive has a place. Then the next assay that Personalis brought to market, which we're obviously their partner in, is really ultra-sensitive, and so there's a place for that as well, where people are really looking for that ultra-sensitivity and specificity and really low limits of detection.

Speaker Change: Uninformed assay.

Jim: It can be logistically problematic, so I think Naive has a place. And then the next assay that Personnel has brought to market, which we're obviously partners in, is really ultra-sensitive, and so there's a place for that as well where people are really looking for that ultra-sensitivity and specificity and really low limits of detection. And so I think, you and I, we have a really nice MRD bag in the market, where we have a really good logistics product and a really ultra-sensitive product, and we think we can meet the needs of the market across that spectrum. But we won't dial up those units for that volume until reimbursement's in sight. Yeah, in terms of reimbursement for our internal costs.

Speaker Change: It can be logistically problematic. So I think naive has a place and then the next assay that personnel brought to market, which we're obviously.

Speaker Change: The partner and is a really ultra sensitive and so there is a place for that as well where people are really looking for that ultra sensitivity and specificity and within the limits of detection and so I think.

Eric Lefkofsky: I think we feel like we've got a really nice MRD bag in market where we have a really good logistical product and a really ultra-sensitive product, and we think we can meet the needs of the market across that spectrum. We won't dial up those units or that volume until reimbursement's in sight, and maybe Jim can give some comments about it.

Speaker Change: We have.

Speaker Change: We feel like we've got a really nice.

Speaker Change: <unk> bag in market.

Speaker Change: We have a really good logistical product and a really ultra sensitive product and we think we can meet the needs of the market across that spectrum, but we wont dialup those units where that volume until reimbursements on site and maybe Jim.

Operator: Yeah, in terms of reimbursement for our internal Tumor Naive panel, we're packaging that up to submit it to HoldX right now, and then that process will play out. That's kind of the back half of 0.5 Degas. I think that's a typical time frame, but we'll certainly provide more color as that process plays out.

Jim Rogers: Yeah. In terms of reimbursement for our internal tumor-naive panel, we're packaging that up to submit it to MolDX right now. That process will play out. You know, you mentioned kind of back half of 25, Tejas. I think that's a typical timeframe, but we'll certainly provide more color as that process unfolds.

Speaker Change: Yeah in terms of reimbursement for our internal Duvernay bet, all we're packaging that up to submit as opex.

Speaker Change: Right now.

Speaker Change: That process will play out so.

Jim Rogers: Just kind of back half of <unk>. So I think that's the typical timeframe, but we'll certainly provide more color as that process unfolds.

Rachel Batendal: Our next question comes from Rachel Batendal of JP Morgan. Please go ahead.

Operator: Our next question comes from Rachel Vatnsdal with JP Morgan. Please go ahead.

Speaker Change: Our next question comes from Rachel backend that JP Morgan. Please go ahead.

Operator: Perfect. Good afternoon, and thanks for taking the questions you guys.

Rachel Vatnsdal: Perfect. Good afternoon, and thanks for taking the questions, you guys. First up, on the genomics performance in the quarter that grew 22% year-over-year. You mentioned all tests performed well in the quarter, but I was wondering if you could unpack that for us a bit more. Walk us through, even if it's from a high-level color standpoint, how each test performed in Q2. Were there any notable shifts in terms of volume contribution by each test as well?

Speaker Change: Perfect. Good afternoon, and thanks for taking the questions you guys. So first up on the genomics to performance in the quarter that grew 22% year on year, you mentioned I'll past the quarter, but I was wondering if you could unpack that for us a bit more walk us through even if it from a high level color standpoint, how each task performed in <unk> and then were there any notable shift in.

Analyst from JP Morgan: So first up on the genomics performance in the quarter, that grew 22% year-on-year. You mentioned all tests performed well in the quarter, but I was wondering if you could unpack that for us a bit more. Walk us through, even if it's from a high-level color standpoint, how each test performed in 2Q and then were there any notable shifts in terms of volume contribution by each test?

Speaker Change: In terms of volume contribution is tasked with Bob.

Eric Lepofsky: Yeah, there was, I mean, nothing material in terms of like a systemic shift in how the orders came in. You know, we have a platform that's in, we're in inherited cancer risk, we're in solid tumor profiling, and lipid biopsies. So we kind of cover all three pretty broadly, and I would say they are all, you know, kind of performing in terms of both unit and revenue growth as they historically have.

Eric Lefkofsky: Yeah. I mean, there was nothing material in terms of like a systemic shift of how the orders came in. You know, we have a platform that's in inherited cancer risk. We're in solid tumor profiling, and liquid biopsies. So we kind of cover all three pretty broadly. I would say all are, you know, kind of performing in terms of both unit and revenue growth as they historically have. There was no like very large cyclical shift as if like all of a sudden our solid tumor went one way or liquid went another. They're all kind of moving in the same direction they were moving in. Obviously or not obviously, but liquid for us was a newer product than solid. Solid was the first assay we launched, and liquid came later.

Speaker Change: Yes, there was I mean, there was nothing material in terms of like a systemic shift of how the how the orders came in we have a platform, that's where an inherited cancer risk.

Speaker Change: In solid tumor profiling in liquid biopsies, but we kind of cover all three pretty broadly and I would say or kind of performing in terms of both unit and revenue growth.

Eric Lepofsky: There's been no, there was no, a very large cyclical shift, as if like all of a sudden our solid tumor went one way, or liquid went another. They're all kind of moving in the same direction they were moving in.

Speaker Change: They historically have there had been no there was no like very large cyclical shift as if like all of a sudden or solid tumor one way or liquid when another theyre all kind of moving in the same direction that we're moving in obviously.

Eric Lepofsky: Obviously, or not obviously, but liquid, for us, was a newer product than solid. Solid was the first assay we launched, and liquid came later, and so the growth rates of that product historically have been higher. But at the end of the day, as these products now get to scale, and we're at scale in terms of ctDNA assays, we're at scale in terms of solitum profiling, and we're approaching scale in terms of inherited cancer risk, I would suspect that the growth rates will start to normalize where you won't see very large differentials between the three as we do. And I think we've also said that liquid was about a quarter of our volume, and it remains as such.

Speaker Change: We're not obviously, but liquid for us was a newer product.

Speaker Change: Then solid solid was the first assay, we launched <unk> liquid came later and so the growth rates of that product historically have been higher.

Eric Lefkofsky: The growth rates of that product historically have been higher. At the end of the day, you know, as these products now get to scale, and we are at scale in terms of, you know, ctDNA assays. We're at scale in terms of solid tumor profiling. We're, you know, approaching scale at inherited cancer risk. I would suspect that the growth rates will start to normalize, where you won't see very large differentials between the three as we keep getting bigger.

Speaker Change: But at the end of the day.

Speaker Change: These products now get to scale and we are at scale in terms of.

Speaker Change: <unk> assays, we're at scale in terms of salt for profiling.

Speaker Change: Approaching scale at inherited cancer risk I would suspect that the growth rates will start to normalize where you won't see.

Speaker Change: Very large differentials between the three as we as we keep getting bigger.

Rachel Vatnsdal: Thank you. Just for my follow-up-

Speaker Change: And I think Thats also recall, we said we are also certainly said that liquid was about a quarter of our volume and it remains as such there has been no stock ship.

Eric Lefkofsky: I think we've also historically said that liquid was about a quarter of our volume, and it remains as such. There's been no systemic shift there.

Analyst from JP Morgan: Perfect. Okay, that's helpful. Then maybe just for my follow-up, could you break down for us the data revenues into Insights, Trials, and AI applications in 2Q? And then, if I look at Guidance, you pointed us towards that $700 million mark in revenues for the year. How should we think about that mix between data versus the genomics business? And then is there any seasonality that we should be aware of across 3Q and 4Q for each of those segments as well?

Rachel Vatnsdal: Perfect. Okay. That's helpful. Maybe just for my follow-up, can you break down for us the data revenues into Insights, trials, and AI applications in Q2? If I look at guidance, you pointed us towards that $700 million mark on revenues for the year. How should we think about that mix between data versus the genomics business? Is there any seasonality that we should be aware of across Q3 and Q4 for each of those segments as well?

Speaker Change: Perfect. Okay. That's helpful. And then maybe just for my follow up can you breakdown for us the data revenue type trials and AI applications and QQ and then if I look at guidance you pointed us towards that $700 million Mark on revenues for the year, how should we think about that mix between data versus the genomics business and then is there any.

Speaker Change: Seasonality that we should be aware of across <unk> and <unk> for each of the segments as well.

Eric Lepofsky: I'll cover the first part, and Jim can take the second part, which seems to be a theme today. So, in terms of the data business, which obviously has some accelerating growth, we provided some color, but Insights led the way. We had a really strong Insights quarter, which is our data licensing business. The trials business grew, but it didn't grow as fast as our data licensing product, Insights. Insights also has a much higher margin.

Eric Lefkofsky: I'll cover the first part, and Jim can take the second part, which seems to be a theme today. In terms of the data business, which obviously has some accelerating growth, you know, we provided some color that Insights led the way. We had a really strong Insights quarter, which is our data licensing business. The trials business grew but didn't grow as fast as our data licensing product Insights. Insights also has a much higher margin. To the extent we want some part of our data and services business growing, you know, we want the Insights portion growing. It has the highest margin, and it's the one that we spend a lot of time focused on.

Speaker Change: I'll cover the first part and Jim can take the second part which seems to be a theme today.

Speaker Change: So in terms of the data business, which obviously had some accelerating growth.

Jim Rogers: We provided some color the insights led the way we had a really strong in.

Jim Rogers: <unk> quarter, which is our data licensing business.

Jim Rogers: The trials business grew but didn't grow as fast as is our data licensing product insights insights also has a much higher margin. So to the extent, we want some part of our data and services business growing we want the insights portion growing.

Eric Lepofsky: So, to the extent that we want some part of our data and services business growing, we want the Insights portion growing because it has the highest margin and it's the one that we spend a lot of time hoping for. Our trials business is really made up of a few components. It's made up of our just-in-time network, which we call Time.

Jim Rogers: It has the highest margin and it's the one that we spent a lot of that focused on our <unk> business is really made up of a few components made up of our just in time network, which we call time, it's made up of small studies component and then it's also made up of our CRM business that we are.

Eric Lepofsky: It's made up of the small studies component, and it's also made up of our CRO business that we call Company. And, you know, we are not investing as heavily in growing our CRO. It's not a core part of our growth strategy. It's an important component of what we do, but it isn't something that we're... focus on growing as much as we do, for example, our insights business. And so I would suspect that, you know, over time, if we continue to deliver,

Eric Lefkofsky: Our trials business is really made up of a few components. It's made up of our just-in-time network, which we call TIME. It's made up of the small little studies component, and it's also made up of our CRO business that we call Compass. You know, we are not investing as heavily in growing our CRO. It's not a core part of our growth strategy. It's an important component of what we do, but it isn't something that we focus on growing as much as we do, for example, our Insights business. You know, over time if we continue to deliver, Insights will continue to outpace our trials business. I would suspect that'll be a trend we see going forward as well.

Jim Rogers: Compass and.

Speaker Change: We are not investing as heavily in growing our CRO.

Jim Rogers: Not a core part of our.

Speaker Change: Our growth strategy is an important component of what we do but it isn't something that we focus on growing as much as we do for example, our insights business. So I would suspect that.

Jim Rogers: Overtime.

Jim Rogers: If we continue to deliver insights will continue to outpace.

Jim Rogers: Our trials business and so I would suspect that will be a trend we see that going for us.

Jim: Yeah, just adding a little bit of color to that breakdown. So the Insight business represents about 75% of the data and services revenues, and at a certain point, also growing the most quickly amongst those components. In terms of the seven, about approximately $700 million in total revenue for the full year 2024, you know, historically it's been kind of a two-thirds, one-third split, two-thirds genomics, one-third data and services. Obviously, the data and services side of things is growing more quickly than the genomics business, and so we would kind of slightly lean toward the data and other business over genomics, you know, for the remainder of the year.

Jim Rogers: Yeah. Just adding a little bit of color to that breakdown. The Insights business represents about 75% of the data and services revenues. To Eric's point, also growing the most quickly amongst those components. In terms of about approximately $700 million total revenue for full year 2024, you know, historically it's been kind of a 2/3, 1/3 split, 2/3 genomics, 1/3 data and services. Obviously, the data and services side of things is growing more quickly than the genomics business. We would kind of slightly lead toward the data and other business over genomics, you know, for the remainder of the year.

Speaker Change: Yes, just adding a little bit of color of that breakdown. So.

Speaker Change: Insight business represent about 75% of the data and services.

Jim Rogers: Revenues at various point also growing the most quickly.

Jim Rogers: Those those components in terms of the seven about <unk> $700 billion in total revenue for full year 2024, historically has been kind of a two third one third split two thirds genomics one third data services, obviously that data and services.

Jim Rogers: Side of things growing more quickly than the genomics business and so we would say.

Speaker Change: Blake lead towards the other.

Jim Rogers: Other business over genomics.

Jim Rogers: For the remainder of the year.

Operator: Michael Ryskin with Bank of America. Please go ahead.

Operator: Michael Ryskin with Bank of America, please go ahead.

Jim Rogers: Michael Rice gain with Bank of America. Please go ahead.

John Kim: Hello, afternoon. This is John Kim on for Mike. Any update on the garden lawsuit? I know it's going to take a few years to play out, but I wanted to see if you guys had any updates.

John Kim: Hello. Afternoon. This is John Kim on for Mike. Any update on the Guardant lawsuit? I know it's gonna take a few years to play out, but yeah, wanted to see if you guys have had any updates.

Jim Rogers: Hello afternoon. This is John Kim on for Mike.

Jim Rogers: Sure.

Speaker Change: Any update on the.

Jim Rogers: Garden lawsuit I know.

Speaker Change: It's going to take a few years to play out but yeah.

Speaker Change: I wanted to.

Speaker Change: Let's see if you guys have any updates.

Eric Lepofsky: No, there's, there's no update. And there likely won't be a material update unless something happens like, you know, For years, these things take a long time to get resolved, as we've said historically. We don't feel like it's material; we feel like we've got an appropriate defense. And it's not something that we're overly concerned with, and I suspect it'll take years to play out. Unfortunately, in our space, you know, litigation has been going on.

Eric Lefkofsky: No, there's no updates. There likely won't be a material update unless something happens like, you know, for years, these things take a long time to get resolved, as we've said historically. We don't feel like it's material. We feel like we've got appropriate defenses, and it's not something that we're overly concerned with. I suspect it'll take years to play out. Unfortunately, in our space, you know, litigation has been a pervasive component of a lot of activity, and I would suspect that will continue just by nature. We're focused on doing what's right for patients. We're focused on making sure that our tests are the best in market, people have access, and that's where we continue to keep, you know, keep our eye on the ball.

Speaker Change: No Theres no office.

Jim Rogers: Likely won't be a material update unless something happens like.

Speaker Change: For years these things take a long time to get resolved as we've said historically.

Speaker Change: And we don't feel like it's material, we feel like we've got appropriate defenses and it's not something that overly concerned with and I suspect it will take years to play out Unfortunately in our space.

Jim Rogers: Litigation has been up.

Eric Lepofsky: A pervasive component of a lot of activity, and I would suspect that will continue just by nature, but we're, you know, we're focused on. I'm doing this right for patients. We're focused on making sure that our tests are the best in the market, people have access, and that's what we can do, keep our eye on the ball.

Speaker Change: A pervasive component of of a lot of activity and I would suspect that will continue just by nature.

Jim Rogers: But where we're focused on.

Speaker Change: And doing what's right for patients we're focused on.

Jim Rogers: Making sure that our tests are the best in market and people have access and that's where we continue.

Speaker Change: We are in malls.

Analyst from Bank of America: Gotcha. And then, in terms of the costs, they came in as expected, but looking ahead, you guys also gave us the... Ibuda Guide there. Any thoughts on when...any change in your thoughts on when you're going to hit the adjusted Ibuda profitability? At a high level, we might.

John Kim: Gotcha. Then in terms of the costs, they came in as expected. Looking ahead, you guys also gave us the EBITDA guide there. Any thoughts on any change in your thoughts on when you're gonna hit the adjusted EBITDA profitability?

Speaker Change: Gotcha and then in terms of the costs came in.

Speaker Change: As expected but.

Speaker Change: Looking ahead you guys also gave us.

Speaker Change: EBITDA guide there any thoughts on when any change in your thoughts on when Youre going to hit the adjusted EBITDA.

Speaker Change: Profitability.

Eric Lepofsky: At a high level, we made, I think, really strong progress in the quarter. I mean, we were 12 and a half, 12.7, 12.7 million in improvement quarter over quarter. So I think, as we told people, we felt like the leverage was showing up in the business, and that was demonstrated, I think, in Q2, and we would suspect that additional leverage will continue as we keep growing, and so we feel like we're right on track.

Eric Lefkofsky: At a high level, we made, I think, really strong progress in the quarter. I mean, we were 12.7. $12.7 million in improvement quarter-over-quarter. I think, as we told people, we felt like the leverage was showing up in the business, and that was demonstrated, I think, in Q2, and we would suspect additional leverage will continue as we keep growing, and so we feel like we're right on track.

Speaker Change: At a high level, we made.

Speaker Change: Really strong progress in the quarter I mean, we were 12 512, seven and $12 7 million an improvement quarter over quarter. So I think.

Speaker Change: As we told people we felt like the leverage was showing up in the business and that was demonstrated I think.

Operator: Daniel Brennan with TD Coven, please go ahead.

Operator: Daniel Brennan with TD Cowen, please go ahead.

Daniel Brennan: Great, thanks. Thanks for the questions.

Daniel Brennan: Great. Thanks, thanks for the questions. Congrats on the quarter here and the IPO. A lot of detail in the prepared remarks or in the script that's on the website regarding the insights business and some of the new contract signings. Maybe can you just expand a little bit there? Maybe starting with Novartis, you discussed there you're gonna deliver this throughout 2024. Can you help kinda us think through kind of the size of that contract or any details around it? Then the new 5-year agreement with Takeda, you discussed that as a significant expansion in size and scope. Maybe can you provide some color on that contract and how we might think about sizing it?

Daniel Brennan: Congratulations on the quarter here in the IPO. There is a lot of detail in the prepared remarks or in the script that's on the website regarding the Insights business and some of the new contract signings. Maybe can you just expand a little bit there?

Eric Lepofsky: Starting with Novartis, you discussed there that you're going to deliver this throughout 2024. Can you help kind of think through the size of that contract or any details around it? And then the new five-year agreement with Decatur, you discussed that as a significant expansion in size and scope. Maybe can you provide some color on that contract and how we might think about sizing it?

Eric Lepofsky: Yeah, I mean, we obviously didn't include numbers for a variety of reasons, not the least of which, you know, we're sensitive to that. We've got partners and those things. There are times that they're appropriate.

Eric Lefkofsky: Yeah. I mean, we obviously didn't include numbers for a variety of reasons, not the least of which, you know, we're sensitive to that we've got partners and those things. There are times that they're appropriate, times that they're not. These are all good size deals for us. They're, you know, I think what we represented in the quarter is that we had multiple large pharma companies, and we didn't list all the smaller biotechs that we also signed various agreements with. We had, you know, kind of four larger pharma companies that all did significant deals in the quarter. For us, it was just a sign of both in terms of the revenue we delivered in our Insights business and the bookings we delivered. Q2 was a really strong data licensing quarter.

Eric Lepofsky: They're not. These are all good size deals for us. And they're, you know, I think what we represented in the quarter is that we had multiple large pharma companies and we didn't list all the smaller biotech companies that we also signed various agreements with, but we had, you know, kind of four larger pharma companies that all did significant deals in the corner. And for us, it was just a sign of both in terms of the revenue we delivered in our insights business and the bookings we delivered.

Speaker Change: There.

Speaker Change: I think what we.

Speaker Change: <unk> represented in the quarter is that we had multiple large pharma companies and we didn't list all of the smaller biotechs that we also signed.

Speaker Change: Various agreements with what we had.

Speaker Change: For larger pharma companies.

Speaker Change: All of this significant deals in the quarter and for US. It was just a sign of both in terms of the revenue we delivered in our insights business and the bookings to be delivered.

Eric Lepofsky: Q2 was a really strong data licensing quarter, and that was good to see. We expected to see it, but it was good to see, and we expect that momentum to continue at least in the future. But we don't really comment on the size of these fields unless they get so big that we, you know, kind of have effectively no choice. And these deals were really good-sized deals, but they weren't $300 million deals where we are. Talk about it.

Speaker Change: Q2 was a really strong data licensing quarter.

Eric Lefkofsky: You know, that was good to see. We expected to see it, but it was good to see. We expect that momentum to continue at least in the foreseeable future. We don't really comment on the size of these deals unless they get so big that we, you know, kind of have effectively no choice. These deals were really good size deals, but they weren't, you know, $300 million deals where we would be, you know, talking about a bigger deal.

Speaker Change: And that's.

Speaker Change: Thats.

Speaker Change: It was good to see we expect to see it but it was good to see.

Speaker Change: We expect that momentum to continue with this.

Speaker Change: In the future, but we don't really comment on the size of these deals once they get so big that we kind of have effectively no choice and.

Speaker Change: These deals were really good sized deals, but they werent $300 million deals, where we would be.

Speaker Change: Talking about deal.

Jim: And I would also add that, again, as Eric pointed out, we delivered a lot of revenue, but obviously, you know, had bookings that kind of refilled that total remaining contract value. And the other metric, which we present on annually, is revenue retention. These are, again, highlighting ones that we had agreements in place, and we're able to expand those in subsequent years. So, we're excited about all the agreements. Yeah, it's really another...

Jim Rogers: Dan, I would also add that, you know, the total remaining contract value is still north of $900 million. Again, as Eric pointed out, we delivered a lot of revenue, but obviously, you know, had bookings that kind of refilled that total remaining contract value. And the other metric which we present on annually is net revenue retention. These are again highlighting ones that we had agreements in place and we're able to expand those in subsequent years. We're excited about all the agreements that were mentioned in the release.

Eric Lukowski: And I would also add that the total remaining contract value is still north of $900 million. So again as Eric pointed out we delivered a lot of revenue, but obviously at bookings that kind of rebuild that total remaining contract value.

Speaker Change: And the other metric, which we presented annually is that revenue retention, but these are getting highlighting ones that we had agreement.

Speaker Change: The agreements in place that we are able to expand those in subsequent years. So we're excited about all the agreements that were mentioned in the release, yes, it's really another.

Eric Lepofsky: Yeah, it's really another, you know, just to jump on Jim's comment, it's one of the most exciting things about the Estella Synthicator Arrangements in addition to the Vartises. These are people that had multi-year agreements and, you know, re-upped for larger agreements or re-upped for larger periods of time. And so that's what you want to see, you know, our Tempus is only eight years old, right? We've only been licensing data for five or six years.

Eric Lefkofsky: Yeah. Another, you know, just to jump on Jim's comment. It's one of the most exciting things about the Astellas and Takeda arrangements in addition to Novartis is these are people that had multiyear agreements and, you know, re-upped for larger agreements or re-upped for larger periods of time. That's what you wanna see. Our company's only eight years old, right? We've only been licensing data for five or six years. What you want, which means that most of our clients have only been clients for two or three years on a data side. Seeing big renewals occur over and over again is a really good sign that we're adding a ton of value, and that value is resonating with our clients.

Jeff: Ill jump on Jeff's comedy that's one of the most exciting things about the Astellas indicated arrangements. In addition, Novartis is these are people that had multi year agreements and re upped for larger agreements or re up for larger periods of time and so that's.

Eric Lepofsky: So what you want, and this means that most of these, most of our clients have only been clients for two or three years on the data side. So seeing big renewals occur over and over again is a really good sign that we're adding a ton of value and that value is responding.

Operator: Please go ahead.

Operator: Dan Arias from Stifel, please go ahead.

Dan Arias: Afternoon, guys. Thanks. Eric, maybe to your point there on data contracts, one of the questions that we got during the process was on the $900 million plus in revenues that are already contracted, but which contains the $300 million from customers that haven't formally renewed. Can you just talk to confidence in re-upping those two accounts? Maybe remind us when it is that those contracts actually come up again for renewal.

Analyst from Stiefel: Eric, maybe to your point there on data contracts, one of the questions that we got during the process was on the $900 million plus in revenues that are already contracted but which includes the $300 million from customers that haven't formally renewed. Can you just talk about confidence in re-upping those two accounts and then maybe remind us when it is that those contracts actually come up again for renewal? Yeah, I mean, they've actually both.

Eric Lepofsky: Yeah, I mean, they've actually both contracts have actually already been extended in terms of timing. So I think in one of the amendments We had another year, I think, to AstraZeneca, something like that, and we have a longer duration now going out with GSK as well. So we have, we've got, I don't know the exact dates, but I'll say roughly 2027, 2028, summer of 2027, 2028, so these contracts go, you know, kind of years in the future, so there's no immediate eclipse coming up, and we feel good about all of our larger deals in terms of the value that we're delivering, and we would suspect that the vast majority of all our big deals renew and hopefully expand.

Eric Lefkofsky: Yeah. I mean, they've actually both contracts have actually already been extended, in terms of timing. I think in one of the amendments, we add another year, I think, to AstraZeneca, something like that, and we have a longer duration now going out with GSK as well. We have. We've got. I don't know the exact dates, but I'll say roughly 2027, 2028. Somewhere 2027, 2028. These contracts go, you know, kind of years in the future. There's no immediate cliffs coming up. We feel good about all of our larger deals in terms of the value that we're delivering, and we would suspect that the vast majority of all our big deals renew, and hopefully expand.

Speaker Change: Yes.

Analyst from Stiefel: Yep. Okay. And then just as a follow-up on the XF asset, do you think you will end up submitting that this quarter, or is it best to think about it as by the end of the year? Sorry, Dave, I didn't catch that one. The submittal of the assay to the FDA, I was under the impression that that was, you know, that's a process that's ongoing now. I'm just curious whether you think you'll get over the hump on that, you know, in the next couple of months, or is it more like a

Dan Arias: Yep. Okay. Just as a follow-up, on the xF assay, do you think you end up submitting that this quarter, or is it best to think about it as by the end of the year?

Speaker Change: Yeah, Okay, and then just as a follow up on the excess asset do you think you end up submitting that this quarter or is it best to think about it is by the end of the year.

Jim Rogers: Sorry, Dan, I didn't catch that one.

Speaker Change: Sorry did I didn't catch that one.

Eric Lefkofsky: xF what?

Dan Arias: The submittal of the assay to the FDA. I was under the impression that that was, you know, that's a process that's ongoing now. I'm just curious whether you think you get over the hump on that, you know, in the next couple of months, or is it more like a December?

Speaker Change: This is the middle of the assay to the FDA I was under the impression that that was that's a process. That's ongoing now and just curious whether you think you'll get over the hump on that.

Speaker Change: And the next couple of months or is it more like a December.

Eric Lepofsky: I don't have the exact timing, but those teams are working on a submittal that's fairly imminent. So I think the bigger issue for us is, both in terms of RNA and our liquid biopsy, we've got efforts in place for both to be submitted. Whether it's one quarter away or two quarters away, it's, you know, these things are all kind of imminent.

Eric Lefkofsky: I don't have the exact timing, but you know, it's those teams are working on a submittal that's, you know, fairly imminent. I think the bigger issue for us is both in terms of RNA and our liquid biopsy. We've got efforts in place for both to submit. You know, whether it's one quarter away or two quarters away, it's you know, these things are all kind of imminently coming.

Speaker Change: I don't have the exact timing, but those teams are working on some middle thats fairly imminent and so I think the bigger issue for us is.

Speaker Change: Both in terms of RNA and our liquid biopsy. We've got we've got efforts in place for both the submitted and you know.

Speaker Change: Whether it's one quarter away or two quarters away. It's these things are all kind of imminent.

Operator: Andrew Brockman with William. Blair, please go ahead. Andrew Brockman, your line is on mute. Yep, hey guys, sorry about that.

Operator: Andrew Brackmann with William Blair, please go ahead. Andrew Brackmann, your line is unmuted.

Andrew Batman: Andrew Batman with.

Andrew Batman: William Blair. Please go ahead.

Speaker Change: Andrew Bob Langer Lang isn't yet.

Andrew Brockman: Hey guys, sorry about that. Good afternoon.

Andrew Brackmann: Yep. Hey, guys, sorry about that. Good afternoon. Thanks for taking the questions. Maybe on the rep side of things, I know you added a few, or I think it was somewhere around 30 in the first part of the year. Can you just give us an update on the productivity of that new cohort as well as just sort of working through any sales force changes or disruptions that may occur as a result of that? Thanks.

Andrew Batman: Hey, guys, sorry about that good afternoon, thanks for taking the question.

Andrew Brockman: Thanks for taking the questions. Maybe on the reps side of things, I know you added a few, or I think it was somewhere around 30 in the first part of the year. So can you just give us an update on the productivity of that new cohort as well as just sort of working through any Salesforce changes or disruptions that may occur as a result of that? Thanks.

Eric Lefkofsky: Yeah, I mean, you know, productivity is not where we want it to be. That's the nicest way for me to say that. I mean, we added, I think it was probably closer to 60, not 30, in terms of total heads that got added in a fairly short duration across the entire sales infrastructure. We added a lot of folks in the first half of this year. We made a lot of territory changes. We introduced a new assay, and the combination of adding a lot of people, changing a lot of territories, and adding a new assay means that our, you know, the efficiency of our sales force in Q2 was not where we want it to be.

Eric Lepofsky: Productivity is not where we want it to be. That's the nicest way for me to say that.

Eric Lepofsky: I think it was probably closer to 60, not 30, in terms of total heads that got added in a fairly short duration across the entire sales infrastructure. We added a lot of folks in the first half of this year. We made a lot of territory changes. We introduced a new assay, and the combination of adding a lot of people, changing a lot of territories, and adding a new assay means that the efficiency of our sales force in Q2 is not where we want it to be.

Eric Lepofsky: You know, we continue to see improvement, and I'm confident I'll get back to where it was in Q3. Children are after that. But at the end of the day, you know, when you're growing as quick as we are, you're adding a lot, a bunch of new assays, time to time you have these step functions and territorial changes, and you've got to manage it really well, and you know we're a young company, and we're always going to have some amount of bump. Okay, but thanks for that number. We kind of, as you can see from the numbers. We managed through all that and still grew our genomics business to 22%, so we've

Eric Lefkofsky: You know, we continue to see improvement and I'm confident it'll get back to where it was in Q3 or shortly thereafter. At the end of the day, you know, when you're growing as quick as we are and you're adding a lot, a bunch of new assays, from time to time, you have these step functions and territorial change, and you gotta manage it really well. You know, we're a young company and we're, you know, we're always gonna have some amount of bumps we go.

Andrew Brackmann: Okay. Thanks for that.

Eric Lefkofsky: If you see the numbers, we managed through all that and still grew our genomics business to 22%, so we feel good about it.

Eric Lepofsky: Perfect, thanks for that Keller. And then maybe just on the purest algo.

Andrew Brackmann: Perfect. Thanks for that color. Maybe just on the PurIST algo. First, can you just remind us the importance of that test for your portfolio and how it can be a differentiator? Also you received a PLA code last month, so how are you thinking about obtaining potential reimbursement there or is this to be sort of a first in the process to obtain reimbursement for these AI tests? Thanks.

Analyst from William Blair: First, can you just remind us the importance of that test for your portfolio and how it can be a differentiator, but then also you received the PLA code last month. So, how are you thinking about obtaining potential reimbursement there or this to be sort of a first step in the process to obtain reimbursement for these tests? Thanks.

Speaker Change: To obtain reimbursement for these AI test thanks.

Eric Lepofsky: Yeah, it was very exciting to be the. We've been the first company to ever have one of these algorithms get a code and get to this point. It's very cool.

Eric Lefkofsky: Yeah. It was very exciting to be the, you know, first company to ever kinda have one of these algorithms get a code and get to this point. It's very cool. I think the way I think about this business and our apps business in general is, you know, we're fortunate that we have a genomics business that's healthy and growing with high margin. We have a data business that's healthy and growing with high margin. In the near term, we don't have to rely on our apps business to generate lots of revenue, which is a very good thing because we as a country and as a healthcare system haven't figured out how to pay for AI.

Speaker Change: Yeah. It was very exciting to me.

Speaker Change: No.

Andrew Batman: The first company to ever have on these algorithms get did get a code and get to this point.

Speaker Change: Very cool, but I think the way I think about this business and our apps business in general as you know we were fortunate that we have a genomics business that is healthy and growing with high margin with the data business, that's healthy and growing with high margin and so in the near term, we don't have to rely on our apps business to generate.

Eric Lepofsky: But I think the way I think about this business and our apps business in general is, you know, we're fortunate that we have a genomics business that's healthy and growing with high margins. We have a data business that's... healthy and growing with a high margin. And so, in the near term, we don't have to rely on our app business to generate lots of revenue, which is a very good thing because we as a country and as a healthcare system haven't figured out how to pay for AI. We haven't figured out when it should be ordered, we haven't figured out how it should be delivered, we haven't figured out how it should be paid for. It's just too new of a space.

Andrew Batman: Lots of revenue, which is a very good thing because we as a country and as the health care system haven't figured out how to pay for AI, we haven't figured out when it should be ordered we haven't figured out how would you be delivered we haven't figured out how would you be paid for it's just too new space and so even though we're excited that a lot of these codes are getting issued.

Eric Lefkofsky: We haven't figured out when it should be ordered, we haven't figured out how it should be delivered, we haven't figured out how it should be paid for. It's just too new of a space. Even though we're excited that a lot of these codes are getting issued and physicians want these kind of algorithmic diagnostics, we still have a ways to go before we can figure out how to get it into guidelines, how to get into routine practice, and how to ultimately get reimbursed for these kind of tests. I would suspect that's a kind of a multi-year journey. We also had our, you know, cardiac algorithm to predict atrial fibrillation was also approved by the FDA, which is amazing. Again, there's not currently a reimbursement pathway for that test. We need to work on, you know, demonstrating.

Andrew Batman: Physicians want these kind of algorithmic diagnostics, we still have a ways to go before we can figure out how to.

Speaker Change: Get it into guidelines how to get into routine practice and how to ultimately get reimbursed for these kind of tests and I would suspect that's kind of a multiyear journey. We also had our our cardiac algorithms to predict atrial fibrillation was also approved by the FDA, which is amazing but again there is not currently a reimbursement pathway for that test.

Eric Lepofsky: But again, there's not currently a reimbursement pathway for that test. So, we need to work on, you know, demonstrating, we've obviously already demonstrated analytical validity. Now we've got to demonstrate clinical validity and ultimately convince payers that it's in their best interest to pay for these kinds of tests. So, that's a multi-year journey. I would suspect that we'll continue to bring many algorithms to market on the website, a very big business one day.

Eric Lefkofsky: We've obviously already demonstrated analytical validity. Now we gotta demonstrate clinical validity and ultimately convince payers that it's in their best interest to pay for these kind of tests. That's a multi-year journey. I would suspect that we'll continue to bring many algorithms to market, and our hope is to build a very broad portfolio of lots of algorithmic diagnostics that are part of our applications business, and to begin this journey of getting reimbursed, and to the extent we're successful, you know, this could be a very big business one day. I mean, as we've said historically, it could, you know, dwarf the other businesses. It is a long journey and, you know, I can't tell you that we're, you know, six months or a year away from seeing light at the end of the tunnel.

Eric Lepofsky: I mean, as we said, historically, it could, you know, it could dwarf the other businesses. But it is a long journey. And, you know, I can't tell you that we're, you know, six months or a year away from seeing or seeing light at the end of the tunnel. It's just too new. So as we know, we'll let you know.

Eric Lefkofsky: It's just too new. As we know, we'll let you guys know.

Operator: Mike Chappell with Loop Capital Markets, please go ahead.

Operator: Mark Schappel with Loop Capital Markets, please go ahead.

Mike Chappell: Hi, thank you for taking my question and congratulations on the quarter and the IPO. Eric, kind of building on the earlier question, I was just wondering if you could just talk about the uptake of your emerging AI applications business. I know it's still early days, but maybe just talk about, you know, what you saw in the quarter up front and then maybe just talk a little bit more about your efforts and initiatives to kind of get those solutions into the healthcare ecosystem. Yeah, we haven't, we haven't.

Mark Schappel: Hi, thank you for taking my question, and congrats on the quarter and the IPO. Eric Lefkofsky, kind of building on the earlier question, I was just wondering if you could just talk about the uptake of your emerging AI applications business. I know it's still early days, but maybe just talk about you know, what you saw in the quarter on that front, and then maybe just talk a little bit more about your efforts and initiatives to kinda get those solutions into the healthcare ecosystem, if you would.

Eric Lefkofsky: Yeah, it's a really promising story, but it's super tiny in terms of revenue. The growth rate of our applications business is really high, but it's also relatively small because again, this stuff, we as a healthcare system haven't figured out how to pay for a lot of these applications. The core components of our apps business today or applications business today, two of the biggest are, you know, next, where we're, you know, basically closing care gaps in real time. We have a series of algorithms, whether that's, you know, across digital pathology or cardiology, that are also, you know, algorithm-based.

Eric Lepofsky: We have a, it's a, it's a really promising, super tiny in terms of So, the core components of our apps business today, or applications business today, two of the biggest are Next, where we're basically closing care gaps in real time, and then we have a series of algorithms, whether it's across digital pathology or cardiology, that are also algorithm-based. But if you look, for example, at Next, just take that one product, it's an amazing product in that we're able to scan real-time clinical data, relatively real-time clinical data, and see... The technology to spot those and try to correct them is really powerful in terms of the benefit provided to patients and physicians. How you get paid for that, though, is a bit harder.

Eric Lefkofsky: If you look, for example, at Tempus Next, just take that one product. It's an amazing product in that we're able to scan real-time clinical data, relatively real-time clinical data, and see essentially errors or mistakes occurring in real time where there are guidelines established and there's routine practice, and yet for some reason, some patient has fallen through a care gap. It happens in healthcare. It's just part of the system. No one's perfect. Using AI and technology to spot those and try to correct them is really powerful in terms of the benefit it provides patients and physicians. How you get paid for that, though, you know, is a bit harder. Again, like we're experiencing, I would say, really positive, strong signs of adoption. People want these kind of applications. They're excited to deploy them.

Speaker Change: Time clinical data.

Speaker Change: And the real time clinical data and see.

Speaker Change: Essentially errors or mistakes occurring in real time, where there are guidelines established and theres routine practice and yet for some reason.

Speaker Change: Some patients has fallen through a caregiver and it happens in health care. It's just part of the system no one's perfect using AI and technology to spot those and try to correct them is really powerful in terms of the benefit provides pay.

Speaker Change: Patients and physicians.

Speaker Change: How you get paid for that though it's a bit harder and so again like.

Eric Lepofsky: And so, again, like I said, we're experiencing, I would say, really positive, strong signs of adoption. People want these kinds of applications, they're excited to deploy them, we're making a ton of progress, but there's still a significant amount of work we have to do as a system, not just Tempus, but anyone who's in AI in healthcare to get these things paid for at scale. So that's what takes us from being a high-growth but small business to a high-growth company.

Speaker Change: We're experiencing I would say really positive strong signs of adoption people want these kinds of applications. They are excited to deploy them were making a ton of progress, but there's still a significant.

Eric Lefkofsky: We're making a ton of progress. There's still a significant amount of work we have to do as a system, not just Tempus, but anyone who's in AI in healthcare to get these things paid for at scale. That's what takes us from being a high-growth but small business to a high-growth but big business.

Speaker Change: Amount of work, we have to do as a system not just tempus, but anyone who is an AI and health care to get these things paid for at scale.

Speaker Change: So that's the that's what takes us from being up.

Speaker Change: High growth with small business to a high growth.

Mark Schappel: Thank you.

Speaker Change: Thank you.

Operator: Ryan Mcdonald with Needham, please go ahead.

Operator: Ryan MacDonald with Needham, please go ahead.

Speaker Change: Ryan Macdonald with Needham <unk>. Please go ahead.

Ryan McDonald: Thanks for taking my questions and congrats on the successful quarter in IPO. Eric, I'm kind of curious, from our healthcare IT side of things, we've actually seen the data space as one that's been really challenged in terms of the level of investment or spend that a lot of large pharmas and biotechs are willing, you know, to allocate this year to other vendors. Can you just talk about, you know, why you've been able to see so much success on the data side of the business and how you're differentiating there and then maybe within the quarter, sort of with the mix of expansions versus net new logos you brought on in the data business?

Ryan MacDonald: Thanks for taking my questions, and congrats on the successful quarter and IPO. Eric, I'm kinda curious, from our healthcare IT side of things, we've actually seen the data space as one that's been really challenged, in terms of the level of investment or spend that a lot of large pharmas and biotechs are willing, you know, to allocate this year from other vendors. Can you just talk about, you know, why you've been able to see so much success, on the data side of the business and how you're differentiating there? Maybe within the quarter, sort of with the mix of expansions versus net new logos you brought on in the data business. Thanks.

Eric Lepofsky: Yeah, I mean, we're experiencing really positive momentum and really strong growth in our data business, I think, on a very tough background. And I think you highlighted that.

Eric Lefkofsky: Yeah. I mean, we're experiencing really positive momentum and really strong growth in our data business. I think in a very tough background. I think you highlighted that. I mean, the macro conditions are not great. You have, you know, biotechs, especially smaller biotechs, that have had a really hard time raising capital for the past several years, and big pharma has been really conscientious about its R&D budgets. We're growing really quickly and continuing to sign, you know, big deals despite what I think of as a tough environment. I think I'm hopeful that the next year or two, when the environment changes, and I believe it will change, I think biotechs will eventually be able to go public again and raise capital. I think we're gonna have some really nice tailwind to that business.

Eric Lepofsky: I mean, the macro conditions are not great. You have, you know, biotechs, especially smaller biotechs that have had a really hard time raising capital for the past several years. And Big Pharma has been really conscientious about its R&D budgets, and so we're growing really quickly and continuing to sign big deals despite what I think of as a tough environment. So I think I'm hopeful that in the next year or two, when the environment changes, and I believe it will change, I think biotechs will eventually be able to go public again and raise capital. I think we're gonna have some really nice tail

Eric Lepofsky: But at the end of the day, the reason that I think we're growing is it's a very simple equation. If you deliver something of value that people want, that's helping them improve their efforts in early stage discovery, improve their ability to design clinical trials, improve their ability to develop assets more efficiently and bring them to market, and get clinical trials closed quicker. These things are all a big deal, and companies are willing to pay money, but you've got to demonstrate that value.

Eric Lefkofsky: At the end of the day, the reason that I think we're growing is it's a very simple equation. You know, if you deliver something of value that people want, that's helping them improve their efforts in early-stage discovery, improve their ability to design, you know, clinical trials, improve their ability to, you know, develop assets more efficiently and bring them to market, get clinical trials closed quicker. Like, these things are all a big deal, and companies are willing to pay money, but you gotta demonstrate that value. In tougher markets, there's kind of like nice to have and need to have. Tempus, at least at the present moment, is kind of need to have data for a lot of people. I think you're right, they're probably cutting back on budgets for nice to have things.

Eric Lepofsky: So in tougher markets, there's kind of a need for and nice to have. And Tempus, at least at the present moment, is kind of neat to have data for a lot of people. And I think you're right, they're probably cutting back on budgets for the nice to have.

Ryan McDonald: Really helpful, Collard. Thanks. Maybe as a follow-up, on the genomic side, you know, given all the positive news that you continue to receive in terms of reimbursement for assays from CMS, can you talk about how you're sort of going about using this in discussions with commercial payers to potentially improve reimbursement? And, you know, what sort of stage are we at in terms of the progression of those discussions? Thanks. Yeah, so I think on the commercial pair side, we're certainly on the same journey that kind of all

Ryan MacDonald: Really helpful color. Thanks. Maybe as a follow-up, on the genomic side, you know, given all the positive news that you continue to receive in terms of reimbursement for assays from CMS, can you talk about how you're sort of going about using this in discussions with the commercial payers to potentially improve reimbursement? You know, what sort of stage are we at in sort of the progression of those discussions? Thanks.

Eric Lepofsky: Yeah, so I think on the commercial pair side, we're certainly on the same journey that kind of all sequencers have kind of followed. Getting CMS coverage is great.

Jim Rogers: Yeah. I think on the commercial payer side, we're certainly on the same journey that kind of all sequencers have followed. Getting CMS coverage is great. That unlocks. FDA approval of some of our assays unlocks the ability to have the discussions with commercial payers. We have gone in-network with Cigna, Humana, and Aetna. We have started to make some progress, still plenty of work to be done. You know, we're having those discussions, but they just take a long time to play out. You know, over the next few quarters, we'll certainly share progress as it's made.

Eric Lepofsky: That unlocks FDA approval for some of your assets. That unlocks kind of the ability to have these discussions with commercial partners. We have gone in network with Cigna, Humana, and Aetna, and so we have started to make some progress; still plenty of work to be done. And, you know, we're having those discussions, but they just take a long time to play out. So, you know, over the next few quarters, we'll certainly share progress.

Speaker Change: We had a and aetna, but so we have started to make some progress still plenty of work to be done.

Speaker Change: We're having those discussions but they just take a long time to play out so over the next few quarters, we'll certainly share progress.

Speaker Change: Yeah.

Speaker Change: Okay.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Thanks, everyone.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Thanks, everyone. You have been removed.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for gaming you may now disconnect.

Eric Lefkofsky: Thanks, everyone.

Speaker Change: Thanks, everyone.

Operator: You have been removed. You have been removed. Thanks for watching!

Liz Krutoholow: You have been removed.

Speaker Change: You have been removed.

Speaker Change: [music].

Operator: Thank you for standing by. I am Augusto, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you will withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Ms. Liz Krutoholow, Vice President of Investor Relations. Please go ahead.

Operator: ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Thank you for standing by. I am Augusto and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2024 financial results conference call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Ms. Liz Crutolo, Vice President of Investor Relations. Please go ahead.

Liz Krutoholow: Thank you. Good afternoon and welcome to Tempus' Q2 2024 Conference Call. This afternoon, Tempus released results for the quarter ended 30 June 2024. Joining me today from Tempus are Eric Lefkofsky, Founder and CEO of Tempus, and Jim Rogers, CFO. Before we begin, I would like to remind you that during this call, management may make forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please visit our 10-Q for the quarter ended 30 June 2024, filed on 6 August 2024, as well as any future reports that we file with the SEC. During the call, we will discuss non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles.

Operator: Thank you. Good afternoon, and welcome to TEMPUS' second... This afternoon, campus review. Joining me today from Tempus are Eric Leskovsky, founder and..., and Jim Ross.

Operator: Before we begin, I would like to remind you that during this call, management may make forward statements that are subject to risks and uncertainties that could cause actual results. For a discussion of these risks, please visit our 10-Q for the quarter ending June 30th. During the call, we will discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted standards. Definitions of these non-GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial models, are included in our second quarter earnings release, which has been furnished to the SEC and is available on our website at investors.tempus.gov. I would now like to turn the call over to you. 1st, welcome everybody.

Eric Lefkofsky: Welcome everybody to our first earnings call as a public company. We're excited to be here and happy to answer some questions. I'll just maybe for 30 seconds give some color. Q2 was a strong quarter. As we provided some additional insight in our overview letter, our core businesses remain on track. Everything is just how you want to see it up and to the right, and we're executing as we had intended both when we began this process a few months ago, going public and then certainly carrying into the quarter. I would say that we feel like we're in good shape and happy to answer any questions that people have.

Eric Lepofsky: to our first earnings call as a public company. We're excited to be here and happy to answer questions. I'll just, maybe, for 30 seconds, give you some color.

Eric Lepofsky: Q2 is a strong quarter. As we provided some additional insight in our overview letter, our core businesses remain on track, as you want to see it up to the right, and we're executing as we had intended both. We began the process a few months ago by going public and then certainly carrying it to the corridors. So I would say that we feel like we're in good shape and happy to answer any questions that people have.

Operator: Operator, we can open the line for questions.

Liz Krutoholow: Operator, we can open the line for questions, please.

Operator: Well, at this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We will pause for just a moment to compile our Q&A roster. For our first question, Tejas Savant with Morgan Stanley, please go ahead.

Analyst from Morgan Stanley: Hey, guys. Good evening, and congrats on a good start out of the gate for COASST IPO. Eric, maybe you or Jim can chime in on this.

Tejas Savant: Hey, guys. Good evening and congrats on a good start out of the gate post IPO. Eric, maybe you or Jim can chime in on this. You know, nice progress on ASPs here on the genomics side in the quarter. Can you just walk us through how you're thinking about potential ASP upside in the back half of the year? You've got the ADLT rate on xT coming through as well, but any color on how much of that is baked in versus progress on the commercial payer front would be great. Thank you.

Analyst from Morgan Stanley: You know, nice progress on ASPs here on the genomic side in the quarter. Can you just walk us through how you're thinking about potentially STFs upside in the back half of the year? You've got the ADLT rate on XT coming through as well. But any color on how much of that is baked in versus progress on the commercial payer front would be great. Thank you.

Eric Lefkofsky: I'll start by covering just the core genomics business and volumes that Jim could talk a little bit about on the reimbursement side. I think in terms of the overall strength of our units and the unit growth, as we covered in our overview letter, we feel like we're completely on track. We delivered roughly 4,000 more tests in the quarter in Q2 over Q1. We expect that trend to continue. You know, there's obviously some kind of percentage seasonality of growth rate in that you could have, you know, fewer days in the quarter or ASCO, depending on when it falls, could have some impact. We feel like our core genomics business is performing as we expected.

Jim: Yeah, thanks for the question. So our average reimbursement in Q2 was about $1,500, an increase of about $50 over where it was at in Q1 of 2024. The biggest drivers in kind of that uplift were a slight makeshift to more Medicare and Medicare Advantage patients, who typically get reimbursement at a higher rate than we get from commercial payers. The reminder, we're primarily an out of network provider with commercial payers, so average reimbursement... significantly lower than what we've received from Medicare.

Jim Rogers: Yeah. Thanks, Tejas, for the question. So our average reimbursement in Q2 was about $1,500, an increase of about $50 over where it was at in Q1 of 2024. The biggest drivers in kind of that uplift were a slight mix shift to more Medicare Advantage, patients, which, typically you reimburse at a higher rate than we get from commercial payers. As a reminder, we're primarily an out-of-network provider, with commercial payers, so average reimbursement is significantly lower than what we've received from Medicare. This presents an opportunity for us going forward as we negotiate with those payers to cover kind of the various tests that we have in market. Tejas, you also mentioned kind of the ADLT status for our xT CDx assay, which is our FDA-approved version of xT.

Speaker Change: Out of network provider.

Speaker Change: Commercial payers, so average reimbursement is.

Speaker Change: Significantly lower than what we've received from Medicare. This presents an opportunity for us going forward as we negotiate with those payers to cover kind of the various tests that we havent market.

Jim: This presents an opportunity for us going forward as we negotiate with those payers to cover kind of the various tests that we have in market. You also mentioned the ADLT status for our XT-CDX assay, which is our FDA-approved version of XT. The initial price there was set at $4,500, but that pricing process will play out over the back half of this year. So there won't be a meaningful impact on ASPs in 2024 as it relates to the FDA-approved version, but as we start to migrate volume to that version of the assay in early 2025,

You also mentioned kind of the ALC status for our <unk> assay, which is our FDA approved version of X T. The initial price there was set at $4500, but that pricing process will play out over the back half of this year. So there won't be a meaningful impact to asps in 2024 as it relates to the FDA approved version, but as we start.

Speaker Change: To migrate.

Speaker Change: Volume to that.

Speaker Change: <unk> version of the assay in early 2025, which we should see some additional talent.

Analyst from Morgan Stanley: Got it. That's helpful. And then guys, just want to dig in a little bit on the MRD launcher. Any anecdotal, you know, early customer feedback you can share? Any sort of differences you'd like to call out in the reception for, you know, the Tumor Naive version versus next personal at this stage? And how are you thinking about volume contributions from MRD in the back half of the year? And then, is reimbursement essentially a back half 2025 dynamic, or could it happen sooner than that?

Tejas Savant: Got it. That's helpful. Guys, just wanna dig in a little bit on the MRD launcher. Any anecdotal, you know, early customer feedback you can share, any sort of like differences you'd like to call out in the reception for, you know, the tumor-naive version versus NeXT Personal at this stage, and how are you thinking about volume contributions from MRD in the back half of the year? Is reimbursement essentially a back half 2025 dynamic, or could it happen sooner than that?

Speaker Change: Got it that's helpful.

Speaker Change: And then guys just wanted to dig in a little bit on the Mardi Lawn chair.

Speaker Change: Anecdotal early customer feedback you can share any sort of like differences you'd like to call out in the reception for the tumor naive version versus exports. So at this stage and how are you thinking about volume contributions from Marty in the back half of the year and then.

Speaker Change: Most of them essentially a back half 2025 dynamic or could it happen sooner than that.

Eric Lepofsky: Yeah, again, I'll cover the overall launch, and maybe Jim can cover some thoughts on reimbursement. So, we launched, for those who don't know, we launched basically our entire MRD platform at ASCO with a tumor-naive assay in colorectal cancer, and then, in partnership with Personalis, we brought a breast, lung, and IO to market as well with a tumor-informed assay. I think the response has been quite positive, even though we're both metering out volume at this point because if we kind of opened up the floodgates, you would likely have an enormous amount of volume that's, at the present moment, not. So given that it takes some time to get reimbursement, we're metering out accounts that we offer the assay to and wrapping up slowly so that we can kind of, you know, manage the expense side That said, everything we hear anecdotally is super positive.

Eric Lefkofsky: Yeah. Again, I'll cover the overall launch, and maybe Jim can cover some thoughts on reimbursement. We launched. For those that don't know, we launched basically our entire MRD platform at ASCO with a tumor-naive assay in colorectal cancer. Then in partnership with Personalis, we brought a breast, lung, and IO to market as well with a tumor-informed assay. The response has been quite positive, even though we're both metering out volume at this point, because if we kind of opened up the floodgates, you would likely have an enormous amount of volume that's, you know, at the present moment, not reimbursed.

Speaker Change: Yeah again I'll cover the overall launch and maybe Jim can cover some thoughts on reimbursement.

Speaker Change: So we.

Speaker Change: We launched for those who don't know.

Speaker Change: Basically our entire MRV platform, <unk>, where the tumor naive assay in colorectal cancer and then in partnership with personality, we brought breast lung and Io.

Jim Rogers: As well with the tumor informed assay.

Speaker Change: I think the response has been quite positive even though.

Speaker Change: Both metering of volume at this point, because if we kind of opened up the floodgates.

Speaker Change: You would likely have an enormous amount of volume that's the present moment not reimbursed.

Eric Lefkofsky: Given that it takes some time to get reimbursement, we're metering out accounts that we offer the assay to and ramping up slowly so that we can kind of, you know, manage the expense side of getting the tested market. That said, everything we hear anecdotally is super positive. As I mentioned to a bunch of folks, historically, tumor-naive has a place in the market given that logistically and administratively, it's just easier than tumor-informed for many accounts that can't do an additional biopsy or don't have enough tissue to basically run, you know, a second set of sequencing. It consumes a lot of tissue every time you sequence a patient.

Speaker Change: Given that it takes some time to get reimbursement.

Speaker Change: Metering out accounts that we offer the assay too.

Speaker Change: And ramping up slowly so that we can kind of manage the expense side.

Speaker Change: Getting the testing market.

Speaker Change: That said everything we hear anecdotally is super positive I think.

Eric Lepofsky: I think, as I mentioned to a bunch of folks historically, tumor naive has a place in the market given that, logistically and administratively, it's just easier than tumor informed. For many accounts that can't do an additional biopsy or don't have enough tissue to basically run, you know, a second set of sequencing consumes a lot of tissue every time you sequence a patient. So, if you've done therapy selection once, now you can do MRD for, you know, an informed assay.

Speaker Change: Two two as I've mentioned.

Speaker Change: Bunch of folks historically tumor naive has.

Speaker Change: A place in the market given that they.

Speaker Change: Just sticking to administratively easier than tumor informed.

Speaker Change: For many accounts that can't do additional biopsy, you don't have enough tissue to basically run.

Speaker Change: Second set of sequencing consumes a lot of tissue every time you sequence of patients. So if you've done therapy selection one thing to do.

Eric Lefkofsky: If you've done therapy selection once, now you have to do a MRD for an informed assay, it can be logistically problematic. I think naive has a place. Then the next assay that Personalis brought to market, which we're obviously their partner in, is really ultra-sensitive, and there's a place for that as well, where people are really looking for that ultra-sensitivity and specificity in looking at the limits of detection. I think we feel like we've got a really nice MRD bag in market where we have a really good logistical product and a really ultra-sensitive product, and we think we can meet the needs of the market across that spectrum.

Speaker Change: Sure.

Speaker Change: Informed assay.

Eric Lepofsky: It can be logistically problematic, so I think Naive has a place. And then the next assay that Personnel brought to market, which we obviously partner in, is really ultra-sensitive, and so there's a place for that as well where people are really looking for that ultra-sensitivity and specificity and really low limits of detection. And so I think, you and I, we have a really nice MRD bag in the market, where we have a really good logistics product and a really ultra-sensitive product, and we think we can meet the needs of the market across that spectrum. But we won't dial up those units or that volume until reimbursement's in sight. Yeah, in terms of reimbursement for our internal costs.

Speaker Change: It can be logistically problematic. So I think naive has a place and then the next assay that personnel across the market, which we're obviously.

Speaker Change: Partnering is a really ultra sensitive and so theres a place for that as well where people are really looking for that ultra sensitivity and specificity and within the limits of detection and so I think.

Speaker Change: We have.

Speaker Change: We feel like we've got a really nice.

Speaker Change: MRV bag in market.

Speaker Change: We have a really good logistical product and a really ultra sensitive product and we think we can meet the needs of the market across.

Speaker Change: That spectrum, but we wont dial up those units for that volume until reimbursements insight maybe Jim Dietz.

Eric Lefkofsky: We won't dial up those units or that volume until reimbursement's in sight, and maybe Jim can give some comments on that.

Jim: Yeah, in terms of reimbursement for our internal Tuber 9 panel, we're packaging that up to submit it to HoldX right now, and then that process will play out. That's kind of the back half of 25. I think that's a typical time frame, but we'll certainly provide more color as that process plays out.

Jim Rogers: Yeah. I mean, in terms of reimbursement for our internal tumor-naive panel, we're packaging that up to submit into CMS right now. That process will play out. You know, you mentioned kind of back half of 2025, Tejas. I think that's a typical timeframe, but we'll certainly provide more color as that process unfolds.

Jim Dietz: Yeah in terms of reimbursement for our internal tumor now you've been all we're packaging that up to submit its opex.

Jim Dietz: Right now.

Jim Dietz: And that process will play out so.

Speaker Change: That's just kind of back half of <unk>. So I think that's a typical timeframe, but we'll certainly provide more color as that process unfolds.

Operator: Our next question comes from Rachel Batendal of KP Morgan. Please go ahead.

Operator: Our next question comes from Rachel Vatnsdal with JP Morgan. Please go ahead.

Speaker Change: Our next question comes from Rachel backing that with JP Morgan. Please go ahead.

Rachel Batendal: Perfect. Good afternoon, and thanks for taking the questions you guys.

Rachel Vatnsdal: Perfect. Good afternoon, and thanks for taking the questions, you guys. First up, on the genomics performance in the quarter, that grew 22% year-over-year. You mentioned all tests performed well in the quarter, but I was wondering if you could unpack that for us a bit more. Walk us through, even if it's from a high-level color standpoint, how each test performed in Q2, and then were there any notable shifts in terms of volume contribution by each test as well?

Speaker Change: Perfect. Good afternoon, and thanks for taking the questions you guys. So first off on the gentlemen performance in the corner and that grew 22% year on year, you mentioned I'll pass along.

Rachel: In the quarter, but I was wondering if you could unpack that for us a bit more walk us through even if it <unk>.

Speaker Change: High level color standpoint, how each task performed in <unk> and then were there any notable shift in terms of volume contribution is tasked with Bob.

Eric Lepofsky: Yeah, there was nothing material in terms of like a systemic shift in how the orders came in. You know, we have a platform that's in, we're in inherited cancer risk, we're in solid tumor profiling, and lipid biopsies. So we kind of cover all three pretty broadly, and I would say they are all kind of performing in terms of both unit and revenue growth as they historically have.

Eric Lefkofsky: Yeah. I mean, there was nothing material in terms of like a systemic shift of how the orders came in. You know, we have a platform that's in. We're in inherited cancer risk, we're in solid tumor profiling, and liquid biopsies. So we kind of cover all three pretty broadly, and I would say all are, you know, kind of performing in terms of both unit and revenue growth as they historically have. There was no, like, very large cyclical shift as if, like, all of a sudden our solid tumor went one way or liquid went another. They're all kind of moving in the same direction they were moving in. Obviously, or not obviously, but liquid for us was a newer product than solid. Solid was the first assay we launched, and liquid came later.

Speaker Change: Yeah. There was I mean, there was nothing material in terms of like a systemic shift of how the how the orders came in we have a platform, that's where an inherited cancer risk. We're in solid tumor profiling and liquids liquid biopsies. So we kind of cover all three pretty broadly and I would say or.

Speaker Change: Kind of performing in terms of both unit and revenue growth.

Speaker Change: As they historically have there'd been no. There was no like very large cyclical shift as if like all of a sudden or solid tumor went one way or liquid went another theyre all kind of moving in the same direction that we're moving in obviously are not.

Eric Lepofsky: There's been no, there was no, a very large cyclical shift, as if, all of a sudden, our solid tumor went one way, or liquid went another. They're all kind of moving in the same direction they were moving in, obviously, or not obviously, but liquid, for us, was a newer product than solid. Solid was the first assay we launched, and liquid came later, and so the growth rates of that product historically have been higher.

Jim Dietz: Obviously, but liquid for us was a newer product.

Jim Dietz: Then solid solid was the first assay, we launched <unk> liquid came later and so the growth rates of that product historically had been higher.

Eric Lefkofsky: The growth rates of that product historically have been higher. At the end of the day, you know, as these products now get to scale, and we are at scale in terms of, you know, ctDNA assays, we're at scale in terms of solid tumor profiling, and we're approaching scale at inherited cancer risk, I would suspect that the growth rates will start to normalize, where you won't see very large differentials between the three as we keep getting bigger.

Eric Lepofsky: But at the end of the day, as these products now get to scale, and we're at scale in terms of ctDNA assays, we're at scale in terms of solitum profiling, and we're approaching scale in terms of inherited cancer risk, I would suspect that the growth rates will start to normalize where you won't see very large differentials between the three, as we have. And I think we've also said that There's been no studies.

Jim Dietz: But at the end of the day.

Speaker Change: As these products now get to scale and we're at scale in terms of.

Speaker Change: <unk> CTD in assays, we're at scale in terms of cell tumor profiling.

Speaker Change: We're approaching scale inherited cancer risks I would suspect that the growth rates will start to normalize where you won't see very.

Speaker Change: Very large differentials between the three as we as we keep getting bigger.

Rachel Vatnsdal: Thank you. Just for my follow-up-

Speaker Change: And I think there's also a small he said we've also historically said that liquid was about a quarter of our volume and it remains as such there has been no stock ship.

Eric Lefkofsky: I think we've also historically said that liquid was about a quarter of our volume, and it remains as such. There's been no systemic shift there either.

Analyst from JP Morgan: Okay, that's helpful. Then maybe, just for my follow-up, can you break down for us the data revenues into insight trials and AI applications in 2Q? And then, if I look at guidance, you pointed us towards that $700 million mark in revenues for the year. How should we think about that mix between data versus the genomics business? And then, is there any seasonality that we should be aware of across 3Q and 4Q for each of those segments as well?

Rachel Vatnsdal: Perfect. Okay, that's helpful. Maybe just for my follow-up, can you break down for us the data revenues into Insights, trials, and AI applications in Q2? If I look at guidance, you pointed us towards that $700 million mark on revenues for the year. How should we think about that mix between data versus the genomics business? Is there any seasonality that we should be aware of across Q3 and Q4 for each of those segments as well?

Speaker Change: Perfect. Okay. That's helpful.

Speaker Change: And then maybe just for my follow up can you breakdown for us the data revenues into insights trials in AI applications and QQ and then if I look at guidance you pointed us towards that $700 million Mark on revenues for the year, how should we think about that mix between data versus the genomics business and then is there any seasonality that we should be aware of across <unk> and <unk>.

Speaker Change: <unk> for each of those segments as well.

Eric Lefkofsky: I'll cover the first part and Jim can take the second part, which seems to be a theme today. In, you know, in terms of the data business, which obviously has some accelerating growth, you know, we provided some color that Insights led the way. We had a really strong Insights quarter, which is our data licensing business. The trials business grew, but didn't grow as fast as our data licensing product Insights. Insights also has a much higher margin. To the extent we want some part of our data and services business growing, you know, we want the Insights portion growing. It has the highest margin and it's the one that we spend a lot of time focused on.

Speaker Change: I'll cover the first part and Jim can take the second part which seems to be a theme today.

Jim: In terms of the data business, which obviously had some accelerating growth.

Speaker Change: We provided some color that insights led the way we had a really strong insights quarter, which is our data licensing business.

Jim: The trials business grew but didn't grow as fast as our data licensing product insights insights also has a much higher margin.

Eric Lepofsky: So, to the extent that we want some part of our data and services business growing, we want the Insights portion growing because it has the highest margin and it's the one that we spend a lot of time focusing on. Our trials business is really made up of a few components. It's made up of our just-in-time network, which we call Time.

Speaker Change: So to the extent, we want some part of our data and services business growing we want the insights portion growing.

Speaker Change: It has the highest margin and it's the one that we spent a lot of time focused on our <unk> business is really made up of a few components. It's made up of our just in time network, which we call time, it's made up of smaller studies component and then it's also made up of our CRM business.

Eric Lefkofsky: Our trials business is really made up of a few components. It's made up of our just-in-time network, which we call Time. It's made up of the small little studies component, and it's also made up of our CRO business that we call Compass. You know, we are not investing as heavily in growing our CRO. It's not a core part of our growth strategy. It's an important component of what we do, but it isn't something that we focus on growing as much as we do, for example, our Insights business. I would suspect that, you know, over time, if we continue to deliver, Insights will continue to outpace our trials business. I would suspect that'll be a trend we see going forward as well.

Eric Lepofsky: It's made up of the small studies component, and it's also made up of our CRO business that we call Company. And, you know, we are not investing as heavily in growing our CRO. It's not a core part of our growth strategy. It's an important component of what we do, but it isn't something that we focus on growing as much as we do, for example, our insights business. And so I would suspect that, you know, over time, if we continue to deliver, Insights will continue to outpace our trials business. So I would suspect that'll be a trend we see. Yeah, just adding a little.

Speaker Change: El Compas, and we are not investing as heavily in growing our CRO.

Speaker Change: It's not a core part of Av Av.

Speaker Change: Over time.

Speaker Change: If we continue to deliver insights will continue to outpace.

Speaker Change: Our trials business.

Speaker Change: So I would suspect that'll be a trend we see that going forward.

Jim: Yeah, just adding a little bit of color to that breakdown. So, the Insight business represents about 75% of the data and services revenues, and at a certain point, also growing the most quickly amongst those components. In terms of the 7, about approximately $700 million in total revenue for full year 2024, you know, historically, it's been kind of a 2 3rd, 1 3rd split, 2 3rd genomics, 1 3rd data and services. Obviously, the data and services side of things is growing more quickly than the genomics business. And so we would slightly kind of. Like, the toward the data, other business over genomics. You know, for the the sake of it.

Jim Rogers: Yeah, just adding a little bit of color to that breakdown. The Insights business represents about 75% of the data and services revenues. To Ari's point, also growing the most quickly amongst those components. In terms of about approximately $700 million total revenue for full year 2024, you know, historically, it's been kind of a 2/3, 1/3 split, 2/3 genomics, 1/3 data and services. Obviously, the data and services side of things is growing more quickly than the genomics business. We would kind of slightly lead toward the data other business over genomics, you know, for the remainder of the year.

Speaker Change: Yes.

Speaker Change: A little bit of color of that breakdown so.

Speaker Change: Site visits represent about 75% of the data and services.

Speaker Change: Revenues at various point also growing the most quickly amongst those those components in terms of the seven about at approximately $700 million in total revenue for full year 2024, historically has been kind of a two third one third split two thirds genomics one third data services, obviously that data and services.

Speaker Change: Things growing more quickly than the genomics business and so we would kind.

Speaker Change: Got it.

Speaker Change: Lead toward the other.

Speaker Change: Other business over genomics.

Speaker Change: For the remainder of the year.

Operator: Michael Ryskin with Bank of America. Please go ahead.

Operator: Michael Ryskin with Bank of America, please go ahead.

Speaker Change: Michael Rice gain with Bank of America. Please go ahead.

John Kim: Hello, afternoon. This is John Kim on for Mike. Any update on the garden lawsuit? I know it's going to take a few years to play out, but I wanted to see if you guys had any updates.

Speaker Change: Hello. Good afternoon. This is John Kim on for Mike.

Speaker Change: <unk>.

Speaker Change: Any update on the.

Speaker Change: Garden lawsuit I know, it's a it's going to take a few years to play out but yeah.

Speaker Change: I wanted to.

Speaker Change: Let's see if you guys have had that any updates.

Eric Lepofsky: No, there's no update, and there likely won't be a material update unless something happens like, you know, For years, these things take a long time to get resolved, as we've said historically. We don't feel like it's material. We feel like we've got appropriate defense, and it's not something that we're overly concerned with, and I suspect it'll take years to play out. Unfortunately, in our space, you know, mitigation has been a pervasive component of a lot of activity, and I would suspect that will continue just by nature.

Eric Lefkofsky: No, there's no updates. There likely won't be a material update unless something happens like, you know. For years, these things take a long time to get resolved, as we've said historically. We don't feel like it's material. We feel like we've got appropriate defenses, and it's not something that we're overly concerned with, and I suspect it'll take years to play out. Unfortunately, in our space, you know, litigation has been a pervasive component of a lot of activity, and I would suspect that will continue just by nature. You know, we're focused on doing what's right for patients. We're focused on making sure that our tests are the best in market and people have access, and that's what we continue to keep, you know, our eye on the ball.

Speaker Change: No Theres no office.

Speaker Change: Likely won't be a material update unless something happens like.

Speaker Change:

Speaker Change: For years these things take a long time to get resolved as we've said historically.

Speaker Change: The litigation has been up.

Speaker Change: A pervasive component of a of a lot of activity.

Speaker Change: <unk> I would suspect that will continue just by nature.

Eric Lepofsky: But we're, you know, we're focused on, I'm doing this right for patients, we're focused on making sure that our tests are the best in the market, people have access, and that's what we can do, people are involved.

Speaker Change: But we're we're focused on.

Speaker Change: And doing what's right for patients we're focused on.

Speaker Change: Making sure that our tests are the best in market and people have access and that's what we can do.

Brian: Thank you Brian.

Speaker Change: Yeah.

Analyst from Bank of America: Gotcha. And then, in terms of the costs, they came in as expected, but looking ahead, you guys also gave us the... Any change in your thoughts on when you're going to hit the adjusted EBITDA profitability? At a high level, we might.

John Kim: Gotcha. In terms of the costs, they came in as expected. Looking ahead, you guys also gave us the EBITDA guide there. Any change in your thoughts on when you're gonna hit the adjusted EBITDA profitability?

Speaker Change: Gotcha, and then in terms of the cost say it came in.

Speaker Change: As expected but.

Speaker Change: Looking ahead you guys also gave us.

Speaker Change: EBITDA guide there any thoughts on when any change in your thoughts on when youre going to hit their adjusted EBITDA.

Speaker Change: Profitability.

Speaker Change: At a high level, we made.

Speaker Change: Really strong progress in the quarter I mean, we were <unk>.

Speaker Change: <unk> going to have 12, seven and $12 7 million an improvement quarter over quarter. So I think.

Speaker Change: As we told people we felt like the leverage was showing up in the business and that was demonstrated I think.

Speaker Change: In Q2, and we would suspect additional leverage will continue as we keep growing and so we feel like we're right on track.

Operator: Daniel Brennan with TD Coven, please go ahead.

Operator: Daniel Brennan with TD Cowen. Please go ahead.

Speaker Change: Daniel when an HDD call then please go ahead.

Daniel Brennan: Great, thanks. Thanks for the questions.

Daniel Brennan: Great. Thanks, thanks for the questions. Congrats on the quarter here and the IPO. A lot of detail in the prepared remarks or in the script that's on the website regarding the Insights business and some of the new contract signings. Maybe can you just expand a little bit there? Maybe starting with Novartis, you discussed there you're gonna deliver this throughout 2024. Can you help kinda us think through kind of the size of that contract or any details around it? Then the new five-year agreement with Takeda, you discussed that as a significant expansion in size and scope. Maybe can you provide some color on that contract and how we might think about sizing it?

Daniel: Great. Thanks, Thanks for the questions congrats on the quarter here in the IPO.

Daniel: A detail in the prepared remarks or in the <unk>.

Speaker Change: That's on the website regarding the insights business and some of the new contract signings, maybe can you just expand a little bit there maybe starting with Novartis you discuss there you're going to deliver this throughout 2024 can you help kind of think through kind of the size of that contract or any details around it and then the new five year agreement with Takeda, we discuss that as a significant expansion in size and <unk>.

Cope: Cope maybe can you provide some color on that contract and how we might think about sizing it.

Eric Lefkofsky: Yeah. I mean, we obviously didn't include numbers for a variety of reasons, not the least of which, you know, we're sensitive to that we've got partners and those things. There are times that they're appropriate, times that they're not. These are all a good size deals for us. They're, you know, I think what we represented in the quarter is that we had multiple large pharma companies, and we didn't list all the smaller biotechs that we also signed various agreements with. We had, you know, kind of 4 larger pharma companies that all did significant deals in the quarter. For us, it was just a sign of both in terms of the revenue we delivered in our Insights business and the bookings we delivered. Q2 was a really strong data licensing quarter.

Speaker Change: Yeah, I mean, we obviously didn't include.

Speaker Change: Our numbers for variety of reasons, not the least of which we're sensitive to that we've got partners in.

Speaker Change: Those things are there.

Speaker Change: At the appropriate times are not these are all good sized deals for us.

Eric Lepofsky: They're not. These are all good size deals for us. And they're, you know, I think what we represented in the quarter is that we had multiple large pharma companies and we didn't list all the smaller biotechs that we also signed various agreements with, but we had, you know, kind of four larger pharma companies that all did significant deals in the quarter. And for us, it was just a sign both in terms of the revenue we delivered in our insights business and the bookings we delivered.

Speaker Change: I think what we've represented in the quarter is that we had multiple large pharma companies and we didn't list all the smaller biotechs that we also signed.

Speaker Change: Various agreements with what we had.

Speaker Change: Kind of for larger pharma companies.

Speaker Change: All of this significant deals in the quarter and for US. It was just a sign of both in terms of the revenue be deliberate in our insights business and the bookings we delivered.

Speaker Change: Q2 was a really strong data licensing quarter.

Eric Lefkofsky: You know, that was good to see. We expected to see it, but it was good to see. We expect that momentum to continue at least in the foreseeable future. We don't really comment on the size of these deals unless they get so big that we, you know, kind of have effectively no choice. These deals were really good sized deals, but they weren't, you know, $300 million deals where we would be, you know, talking about a bigger deal.

Speaker Change: And that's.

Speaker Change: That was good to see we expected to see it but it was good to see and we expect that momentum to continue.

Speaker Change: In the future, but we don't really comment on the size of these deals once they get so big that we kind of have have effectively no choice and.

Speaker Change: These deals were really good sized deals, but they werent in a $300 million deals where we would be.

Speaker Change: Talking about accretive deal.

Jim Rogers: Yeah, I would also add that, you know, the total remaining contract value is still north of $900 million. As Eric pointed out, we delivered a lot of revenue, but obviously, you know, had bookings that kind of refilled that total remaining contract value. The other metric which we present on annually is net revenue retention. These are again highlighting ones that we had agreements in place and we're able to expand those in subsequent years. We're excited about all the agreements that were mentioned in the release.

Speaker Change: Yeah, and I would also add that the total remaining contract value is still north of $900 million. So again as Eric pointed out we delivered a lot of revenue, but obviously at bookings that kind of rebuild that total remaining contract value.

Speaker Change: And the other metric, which we presented annually is that revenue retention. These are getting to highlighting ones that we had agreements.

Speaker Change: The agreements in place that were able to expand those in subsequent years. So we're excited about all the agreements I mentioned, yes, it's really another.

Eric Lepofsky: Yeah, it's really another, you know, just to jump on Jim's comment, it's one of the most exciting things about the Estella Synthic Data Arrangements, in addition to the Vardises, these are people that had multi-year agreements and, you know, re-upped for larger agreements or re-upped for larger periods of time. And so that's what you want to see, you know, Tempus is only eight years old, right? It's only been licensing data for five or six years.

Eric Lefkofsky: Yeah. Another, you know, just to jump on Jim's comment. One of the most exciting things about the Astellas and Takeda arrangements, in addition to Novartis, is these are people that had multi-year agreements and, you know, re-upped for larger agreements or re-upped for larger periods of time. That's what you want to see. Our company's only 8 years old, right? We've only been licensing data for 5 or 6 years. Which means that most of our clients have only been clients for 2 or 3 years on the data side. Seeing big renewals occur over and over again is a really good sign that we're adding a ton of value, and that value is resonating with our clients.

Jeff: To jump on Jeff's comedy that's one of the most exciting things about the Astellas indicated arrangements. In addition, Novartis is these are people that had multi year agreements and re upped for larger agreements or re up for larger periods of time and so that's what you want to see are definitely eight years old right. It's only been licensing data for <unk>.

Eric Lepofsky: So, what you want, and which means that most of these, most of our clients have only been clients for two years, on the data side. So, seeing big renewals occur over and over again is a really good sign that we're adding a ton of value, and that value is resonating.

Speaker Change: For six years, so what you want and which means that most of these most of our clients have only been clients for two or three years on the data side, so seeing big renewals occur over and over again is a really good sign that we're adding a ton of value and that value is resonating with our clients.

Operator: Dan Arias from Stiefel, please go ahead.

Operator: Yes, from Stifel. Please go ahead.

Speaker Change: Then I see from Stifel. Please go ahead.

Dan Arias: Eric, maybe to your point there on data contracts, one of the questions that we got during the process was on the $900 million plus in revenues that are already contracted but which contains the $300 million for customers that haven't formally renewed. Can you just talk about confidence in re-upping those two accounts and then maybe remind us when it is that those contracts actually come up again for renewal? Yeah, I mean, they've actually both.

Speaker Change: Afternoon, guys. Thanks, Eric maybe to your point there on data data contracts one of the questions that we got during the process was on the 900 million plus in revenues that are already contracted but which contains the 300 million for customers that haven't formally renewed can you just.

Speaker Change: <unk> talked to confidence and re upping those two accounts and then maybe remind us.

Speaker Change: When it is that those contracts actually come up again for renewal.

Eric Lepofsky: Yeah, I mean, they've actually, both contracts have actually already been extended in terms of timing. So, I think in one of the amendments We had another year, I think, to AstraZeneca, something like that, and we have a longer duration now going out with GSK as well. So we have, we've got, I don't know the exact dates, but I'll say roughly 2027, 2028, summer of 27, 28, so these contracts go, you know, kind of years in the future, so there's no immediate cliffs coming up, and we feel good about all of our larger deals in terms of the value that we're delivering, and we would suspect that the vast majority of all our big deals were new and hopefully expand.

Eric Lefkofsky: Yeah, I mean, they've actually, both contracts have actually already been extended, in terms of timing. I think in one of the amendments, we add another year, I think, to AstraZeneca, something like that. We have a longer duration now going out with GSK as well. I don't know the exact dates, but I'll say roughly 2027, 2028. It's that these contracts go, you know, kind of years in the future. There's no immediate cliffs coming up. We feel good about all of our larger deals in terms of the value that we're delivering, and we would suspect that the vast majority of all our big deals renew, and hopefully expand.

Speaker Change: Yeah, I mean, they are actually bullish both contracts and work to actually already been extended.

Speaker Change: In terms of timing, so I think in one of the amendments.

Speaker Change: We add another year I think the astrazeneca something like that and we have a longer duration now going out with GSK as well. So we have we.

Speaker Change: We've got I don't even I don't know the exact dates, but I'll say roughly 2027 28 somewhere 27 28 so.

Speaker Change: These contracts go kind of years in the future.

Speaker Change: So theres no immediate eclipse coming up.

Speaker Change: And we.

Speaker Change: We feel good about all of our larger deals in terms of the value that we're delivering and we would suspect that the vast majority of all our big deals renew.

Speaker Change: And hopefully expand.

Analyst from Stiefel: Yep. Okay. And then just as a follow-up on the excess asset, do you think you will end up submitting that this quarter, or is it best to think about it as by the end of the year? Sorry, David, I didn't catch that. The submittal of the assay to the FDA, I was under the impression that that was, you know, that's a process that's ongoing now. I'm just curious whether you think you'll get over the hump on that, you know, in the next couple of months, or is it more like a

Dan Arias: Yep. Okay. Just as a follow-up, on the xF assay, do you think you end up submitting that this quarter, or is it best to think about it as by the end of the year?

Speaker Change: Okay, and then just as a follow up on the excess asset do you think you end up submitting that this quarter or is it best to think about it is by the end of the year.

Jim Rogers: Sorry, Dan, I didn't catch that one.

Speaker Change: Sorry, David I didn't catch that one.

Eric Lefkofsky: xF what?

Speaker Change: This the middle of the assay to the FDA I was under the impression that that was that's a process. That's ongoing now and just curious whether you think you'll get over the hump on that.

Speaker Change: And the next couple of months or is it more like a December.

Eric Lepofsky: I don't have the exact timing, but those teams are working on a middle that's fairly imminent. And so I think the bigger issue for us is both in terms of RNA and our liquid biopsy. We've got efforts in place for both to be submitted, and, you know, Whether it's one quarter away or two quarters away, these things are all kind of imminent.

Eric Lefkofsky: I don't have the exact timing, but you know, it's those teams are working on a submittal that's you know, fairly imminent. I think the bigger issue for us is both in terms of RNA and our liquid biopsy, we've got efforts in place for both to submit. You know, whether it's 1 quarter away or 2 quarters away, it's you know, these things are all kind of imminently coming.

Speaker Change: I don't have the exact timing, but it's.

Speaker Change: Those teams are working on some middle Thats fairly imminent and so I think the bigger issue for us is.

Speaker Change: Both in terms of RNA and our liquid biopsy. We've got we've got efforts in place for both to submit and you know.

Speaker Change: Whether it's one quarter away or two quarters away.

Speaker Change: These things are all kind of imminent.

Operator: Andrew Brockman, with William Blair, please go ahead. Andrew Brockman, your line is on mute.

Operator: Andrew Brackmann with William Blair. Please go ahead. Andrew Brackmann, your line is unmuted.

Andrew Brown: Andrew Brown.

Speaker Change: William Blair. Please go ahead.

Andrew Brown: Andrew Bob Langer line isn't yet.

Andrew Brockman: Hey guys, sorry about that. Good afternoon.

Andrew Brackmann: Yep. Hey, guys, sorry about that. Good afternoon. Thanks for taking the questions. Maybe on the rep side of things, I know you added a few or I think it was somewhere around 30 in the first part of the year. Can you just give us an update on the productivity of that new cohort as well as just sort of working through any sales force changes or disruptions that may occur as a result of that? Thanks.

Andrew Brown: Hey, guys, sorry about that good afternoon, thanks for taking the questions.

Andrew Brockman: Thanks for taking the questions. Maybe on the rep side of things, I know you added a few, or I think it was somewhere around 30 in the first part of the year. So can you just give us an update on the productivity of that new cohort as well as just sort of working through any Salesforce changes or disruptions that may occur as a result of that? Thanks.

Speaker Change: Maybe on the Rep side of things I know you added a few or I think it was somewhere around 30 in the first part of the year. So can you just give us an update on the productivity of that new cohort as well as just sort of working through any salesforce changes or disruptions that may occur as a result of that.

Speaker Change: Yes, I mean no.

Eric Lepofsky: Productivity is not where we want it to be. That's the nicest way for me to say that.

Speaker Change: Productivity is not where we want it to be that's the nicest way for me to say that I mean, we added I think it was.

Eric Lepofsky: I mean, I think it was probably closer to 60, not 30, in terms of total heads that got added in a fairly short duration across the entire sales infrastructure. We added a lot of folks in the first half of this year. We made a lot of territory changes. We introduced a new assay, and the combination of adding a lot of people, changing a lot of territories, and adding a new assay means that the efficiency of our sales force in Q2 is not where we want it to be.

Speaker Change: Probably closer to 60, not 30 in terms of total heads that got added in a fairly short duration across the entire sales infrastructure. So we added a lot of folks in the in the first half of this year.

Speaker Change: We made a lot of territory changes.

Speaker Change: We introduced a new assay and the combination of adding a lot of people changing a lot of territories and adding a new assay means that our efficiency of our sales force in Q2 was not where we want it to be.

Eric Lepofsky: You know we we continue to see improvement, and I'm I'm confident I'll get back to where it was in Q3 or so. Children are after. But at the end of the day, you know, when you're growing as quick as we are and you're adding a lot, a bunch of new assays, time to time, you have these step functions and territorial changes, and you've got to manage it really well, and you know we're a young company, and we're always going to have some, some amount of, Okay, thanks for that, and the numbers we kind of We managed through all that and still grew our genomics business to 22%, so we've

Eric Lefkofsky: You know, we continue to see improvement, and I'm confident it'll get back to where it was in Q3 or shortly thereafter. At the end of the day, you know, when you're growing as quick as we are and you're adding a lot, a bunch of new assays, from time to time you have these step functions in territorial change, and you gotta manage it really well. You know, we're a young company, and we're, you know, we're always gonna have some amount of bumps we go.

Speaker Change: We continue to see improvement.

Speaker Change: Confident you'll get back to where it was in Q3 year.

Speaker Change: Shortly thereafter, but at the end of the day.

Speaker Change: When youre growing as quick as we are and you're adding a bunch of new assays.

Speaker Change: From time to time, you have these step functions and territorial change and you got to manage it really well.

Speaker Change: And we're a young company and we're always going to have some some some amount of bumps deal.

Andrew Brackmann: Okay. Thanks for that.

Eric Lefkofsky: You can see the numbers. We kind of, as you can see the numbers, we managed through all that and still grew our genomics business at 22%, so we feel good about it.

Speaker Change: Okay. Thanks for that skewed the numbers, we kind of as you can see the numbers.

Speaker Change: We managed through all that and still grew our genomics business a 22% so we.

Speaker Change: We feel good about it.

Analyst from William Blair: Perfect. Thanks for that, Keller. And then maybe just on the purest algo level, first, can you just remind us the importance of that test for your portfolio and how it can be a differentiator? But then also, you received a PLA code last month, so how are you thinking about obtaining potential reimbursement there to be sort of a first in the process to obtain reimbursement for these AI tests? Thanks.

Andrew Brackmann: Perfect. Thanks for that color. Maybe just on the PurIST. First, can you just remind us the importance of that test for your portfolio and how it can be a differentiator? Also you received a PLA code last month, so how are you thinking about obtaining potential reimbursement there or in this to be sort of a first in the process to obtain reimbursement for these AI tests? Thanks.

Speaker Change: Perfect. Thanks for that color and then maybe just on the purest I'll go first can you just remind us the importance of that test for your portfolio and how it can be a differentiator. But then also you received the BLA code last month. So how are you thinking about obtaining potential reimbursement there are in this <unk>.

Speaker Change: Sort of a first in the process to obtain reimbursement for these AI test. Thanks.

Eric Lepofsky: Yeah, it was very exciting to be the... the first company to ever kind of have one of these algorithms get a code and get to this point. It's very cool.

Eric Lefkofsky: Yeah, it was very exciting to be the, you know, first company to ever kinda have one of these algorithms get a code and get to this point. It's very cool. But I think the way I think about this business and our apps business in general is, you know, we're fortunate that we have a genomics business that's healthy and growing with high margin. We have a data business that's healthy and growing with high margin. In the near term, we don't have to rely on our apps business to generate lots of revenue, which is a very good thing because we as a country and as a healthcare system haven't figured out how to pay for AI. We haven't figured out when it should be ordered. We haven't figured out how it should be delivered.

Speaker Change: Yeah. It was very exciting to me to be the.

Speaker Change: The first company to ever have on these algorithms get did get a code and get to this point very cool, but I think the way I think about this business and our apps business in general as you know.

Speaker Change: We were fortunate that we have a genomics business that is healthy and growing with high margin. We have a data business, that's healthy and growing with high margin and so in the near term, we don't have to rely on our apps business to generate lots of revenue, which is a very good thing because we as a country and as the health care system haven't fit.

Speaker Change: Your it out how to pay for AI, we haven't figured out when it should be ordered we haven't figured out how would you be delivered we haven't figured out how would you be paid for it's just too new space and so even though we're excited that a lot of these codes are getting issued and physicians want these kind of algorithmic diagnostics, we still have a ways to go before we can figure out.

Eric Lefkofsky: We haven't figured out how it should be paid for. It's just too new of a space. Even though we're excited that a lot of these codes are getting issued and physicians want these kind of algorithmic diagnostics, we still have a ways to go before we can figure out how to get it into guidelines, how to get into routine practice, and how to ultimately get reimbursed for these kind of tests. I would suspect that's a kind of a multi-year journey. We also had our, you know, our cardiac algorithm to predict atrial fibrillation was also approved by the FDA, which is amazing. Again, there's not currently a reimbursement pathway for that test. We need to work on, you know, demonstrating. We've obviously already demonstrated analytical validity.

Eric Lepofsky: And so, even though we're excited that a lot of these codes are getting issued, and physicians want these kinds of algorithmic diagnostics, we still have a ways to go before we can figure out how to get it into guidelines, how to get it into routine practice, and how to ultimately get reimbursed for these kinds of tests. And I would suspect that's a kind of a multi-year journey. We also had our, you know, our cardiac algorithms that predict atrial fibrillation were also approved by the FDA, which is amazing, but again, there's not currently a reimbursement pathway for that test. So we need to work on demonstrating, we've obviously already demonstrated analytical validity, now we've got to demonstrate clinical validity and ultimately convince payers that it's in their best interest to pay for these kinds of tests.

Speaker Change: How to get it in the guidelines how to get into routine practice and how to ultimately get reimbursed for these kind of tests and I would suspect that's kind of a multiyear journey. We also had our our cardiac algorithms to predict atrial fibrillation was also approved by the FDA, which is amazing but again there is not currently a reimbursement pathway for that test.

Speaker Change: Yeah.

Speaker Change: So we need to work on demonstrating we've obviously already demonstrated analytical validity now we've got a demonstrated clinical validity and ultimately you convince payers that its in their best interest to pay for these kind of tests. So that's a multiyear journey.

Eric Lefkofsky: We got to demonstrate clinical validity and ultimately convince payers that it's in their best interest to pay for these kind of tests. That's a multi-year journey. I would suspect that we'll continue to bring many algorithms to market. Our hope is to build a very broad portfolio of lots of algorithmic diagnostics that are part of our applications business. To begin this journey of getting reimbursed, and to the extent we're successful, you know, this could be a very big business one day. I mean, as we've said historically, it could, you know, dwarf the other businesses. It is a long journey, and you know, I can't tell you that we're, you know, six months or a year away from seeing light at the end of the tunnel. It's just too new.

Eric Lepofsky: So that's a multi-year journey. I would suspect that we'll continue to bring many algorithms to market. And our hope is to build a very broad portfolio of lots of algorithmic diagnostics that are part of our applications business and to begin this journey of getting reimbursed. And to the extent we're successful, you know, this could be a very big business one day. As we've said, historically, it could, you know, it could dwarf the other businesses.

Speaker Change: I would suspect that we will continue to bring many algorithms to market.

Speaker Change: And our hope is to build a very broad portfolio of lots of algorithmic diagnostics that are part of our applications business and to begin this journey of getting reimbursed and to the extent we're successful.

Speaker Change: Could be.

Speaker Change: Very big business one day.

Speaker Change: As we've said historically it could it could dwarf the other businesses, but it is a long journey.

Eric Lepofsky: But it is a long journey. And, you know, I can't tell you that we're, you know, six months or a year away from seeing the end of the tunnel. It's just too new. So as soon as we know, we'll let you know.

Speaker Change: You know I can't tell you that were you know six months or a year away from us.

Speaker Change: We're seeing light at the end of the tunnel, it's just too new.

Eric Lefkofsky: As we know, we'll let you guys know.

Speaker Change: So as we know as we know more we'll let you guys.

Operator: Mike Chappell with Loop Capital Markets, please go ahead.

Operator: Mark Schappel with Loop Capital Markets, please go ahead.

Speaker Change: Mike.

Speaker Change: Loop capital markets. Please go ahead.

Mike Chappell: Hi, thank you for taking my question and congratulations on the quarter and the IPO. Eric, kind of building on the earlier question, I was just wondering if you could just talk about the uptake of your emerging AI applications business. I know it's still early days, but maybe just talk about what you saw in the quarter up front and then maybe just talk a little bit more about your efforts and initiatives to kind of get those solutions into the healthcare ecosystem. Yeah, we have, we have a, it's a

Mark Schappel: Hi, thank you for taking my question and congrats on the quarter and the IPO. Eric, kind of building on the earlier question, I was just wondering if you could just talk about the uptake of your emerging AI applications business. I know it's still early days, but maybe just talk about you know, what you saw in the quarter on that front, and then maybe just talk a little bit more about your efforts and initiatives to kinda get those solutions into the healthcare ecosystem, if you would.

Mike: Alright. Thank you for taking my question and congrats on the quarter and the IPO Eric.

Speaker Change: Eric kind of building on the earlier question I was just wondering if you could just talk about the uptake of your emerging AI.

Eric Lepofsky: It's really promising. So the growth rate of our applications business is really high, but it's also relatively small because, again, this stuff we as a healthcare system haven't figured out how to pay for a lot of these applications. So, the core components of our apps business today, or applications business today, two of the biggest are Next, where we're basically closing care gaps in real time, and then we have a series of algorithms, whether it's across digital pathology or cardiology, that are also algorithm-based.

Speaker Change: Applications business I know, it's still early days.

Speaker Change: Can you just talk about what you saw in the quarter on that front and then maybe just talk a little bit more about your efforts and initiatives to kind of get their solutions into the healthcare ecosystem to it.

Eric Lefkofsky: Yeah, it's a really promising story, but it's super tiny in terms of revenue. The growth rate of our applications business is really high. It's also relatively small because again, this stuff, we as a healthcare system haven't figured out how to pay for a lot of these applications. The core components of our apps business today or applications business today, two of the biggest are Next, where we're basically closing care gaps in real time. We have a series of algorithms, whether that's across digital pathology or cardiology, that are also algorithm-based. If you look, for example, at Next, just take that one product.

Speaker Change: Yes, we haven't we haven't.

Speaker Change: It's a.

Speaker Change: It's a really promising.

Speaker Change: Story, but it's super tiny in terms of revenue so the growth rate of our of our applications business is really high.

Speaker Change:

Speaker Change: But it's also relatively small because again this stuff we as a health care system haven't figured out how to pay for a lot of these applications. So that the core components of our of our apps business today, our applications business today two of the biggest are.

Speaker Change: Next where we are.

Speaker Change: Basically closing care gaps in real time, and then we have a series of algorithms, whether that's across digital pathology of cardiology. There also.

Eric Lepofsky: But if you look, for example, at Next, just take that one product, it's an amazing product in that we're able to scan real-time clinical data, or relatively real-time clinical data, and see... really powerful in terms of the benefit it provides patients and physicians. How you get paid for that, though, it's a bit harder, and so again, like.

Speaker Change: But if you look for example at next just take that one product, it's an amazing product and that we're able to scan real time clinical data are relatively real time clinical data and see.

Eric Lefkofsky: It's an amazing product in that we're able to scan real-time clinical data, or relatively real-time clinical data, and see essentially errors or mistakes occurring in real time where there are guidelines established and there's routine practice, and yet for some reason, some patient has fallen through a care gap. It happens in healthcare. It's just part of the system. No one's perfect. Using AI and technology to spot those and try to correct them is really powerful in terms of the benefit it provides patients and physicians. How you get paid for that, though, you know, is a bit harder. Again, like we're experiencing, I would say, really positive, strong signs of adoption. People want these kind of applications. They're excited to deploy them.

Speaker Change: Essentially errors or mistakes occurring in real time, where there are guidelines established and theres routine practice and yet for some reason.

Speaker Change: Some patient has fallen through a caregiver.

Speaker Change: It happens in health care, it's just part of the system no one's perfect using AI technology to spot those and try to correct them is really powerful in terms of the benefit provides.

Speaker Change: <unk> and physicians.

Speaker Change: How you get paid for that though it's a bit harder and so again like.

Eric Lepofsky: We're experiencing, I would say, really positive, strong signs of adoption. People want these kinds of applications. They're excited to deploy them. We're making a ton of progress, but there's still a significant amount of work we have to do as a system, not just Tempus, but anyone who's in AI in healthcare to get these things paid for at scale. So that's what takes us from being a high-growth but small business to a high-growth company.

Eric Lefkofsky: We're making a ton of progress, but there's still a significant amount of work we have to do as a system, not just Tempus, but anyone who's in AI in healthcare to get these things paid for at scale. That's what takes us from being a high growth but small business to a high growth but big business.

Speaker Change: Amount of work, we have to do as a system not just tempus, but anyone who is an AI and health care to get these things paid for at scale.

Speaker Change: So that's the that's what takes us from being up.

Speaker Change: High growth with small business to a high growth.

Mark Schappel: Thank you.

Speaker Change: Thank you.

Operator: Ryan Mcdonald with Needham, please go ahead.

Operator: Ryan MacDonald with Needham. Please go ahead.

Speaker Change: Okay.

Ryan Macdonald: Ryan Macdonald Needham. Please go ahead.

Ryan McDonald: Thanks for taking my questions and congrats on a successful quarter in IPO. Eric, I'm kind of curious. From our healthcare IT side of things, we've actually seen the data space as one that's been really challenged in terms of the level of investment or spend that a lot of large pharmas and biotechs are willing to allocate this year to other vendors. Can you just talk about, you know, why you've been able to see so much success on the data side of the business and how you're differentiating there, and then maybe within the quarter, sort of, with the mix of expansions versus net new logos you brought on in the data business? Thanks.

Ryan MacDonald: Thanks for taking my questions, and congrats on the successful quarter and IPO. Eric, I'm kinda curious, from our healthcare IT side of things, we've actually seen the data space as one that's been really challenged, in terms of the level of investment or spend that a lot of large pharmas and biotechs are willing, you know, to allocate this year from other vendors. Can you just talk about, you know, why you've been able to see so much success, on the data side of the business and how you're differentiating there? Then maybe within the quarter, sort of with the mix of expansions versus net new logos you brought on in the data business. Thanks.

Speaker Change: Alright, Thanks for taking my questions and congrats on a successful quarter in IPO.

Eric Lukowski: Eric I'm kind of curious from our healthcare it side of things, we've actually seen the data space is one that's been really challenged in terms of the level of investment or spend that a lot of large pharma and biotechs are willing to allocate this year from other vendors can you just talk about <unk>.

Speaker Change: Why you've been able to see so much success on the data side of the business and how you're differentiating there and then maybe within the quarter sort of what the mix of expansions versus net new logos you brought on in the data business. Thanks.

Eric Lepofsky: Yeah, I mean, we're experiencing really positive momentum and really strong growth in our data business, I think, in a very tough background. And I think you highlighted that.

Eric Lefkofsky: Yeah. I mean, we're experiencing really positive momentum and really strong growth in our data business, I think in a very tough background. I think you highlighted that. I mean, the macro conditions are not great. You have, you know, biotechs, especially smaller biotechs, that have had a really hard time raising capital for the past several years, and big pharma has been really conscientious about its R&D budgets. We're growing really quickly and continuing to sign, you know, big deals despite what I think of as a tough environment. I think I'm hopeful that in the next year or two, when the environment changes, and I believe it will change, I think biotechs will eventually be able to go public again and raise capital. I think we're gonna have some really nice tailwind to that business.

Speaker Change: Yes, I mean, we're experiencing really positive momentum and really strong growth in our data business I think in a very tough background.

Eric Lepofsky: I mean, the macro conditions are not great. You have, you know, biotechs, especially smaller biotechs that have had a really hard time raising capital for the past several years. And Big Pharma has been really conscientious about its R&D budgets, growing really quickly, and continuing to sign big deals, despite what I think of as a tough environment. So I think I'm hopeful that in the next year or two, when the environment changes, and I believe it will change, I think biotechs will eventually be able to go public again and raise capital. I think we're gonna have some really nice tailwinds for

Speaker Change: And I think you highlighted that I mean, the macro conditions are not great you have biotechs, especially smaller biotechs that have had a really hard time recent capital for the past several years and big pharma has been really conscientious about its R&D budgets and so we are.

Speaker Change: Growing really quickly and continuing to sign big deals. Despite when I think of is a tough environment. So I think I'm hopeful that in the next year or two when the environment changes and I believe it will change I think biotechs will eventually be able to go public again to raise capital I think we're going to have some really nice tailwind for that business, but at the end.

Eric Lefkofsky: At the end of the day. The reason that I think we're growing is it's a very simple equation. You know, if you deliver something of value that people want, that's helping them improve their efforts in early-stage discovery, improve their ability to design, you know, clinical trials, improve their ability to, you know, develop assets more efficiently and bring them to market, get clinical trials closed quicker. Like, these things are all a big deal, and companies are willing to pay money, but you gotta demonstrate that value. In tougher markets, there's kind of like nice to have and need to have. Tempus, at least at the present moment, is kind of need to have data for a lot of people. I think you're right, they're probably cutting back on budgets for nice to have things.

Speaker Change: The day.

Speaker Change: Reason that I think we're growing is it's a very simple equation.

Speaker Change: Liver something of value that people want that's helping them.

Speaker Change: Improve their efforts in early stage discovery to prove their ability to design clinical trials improve their ability to develop assets more efficiently bring them to market get clinical trials closed quicker like these things are all a big deal and companies are willing to pay money, but you got to demonstrate that value.

Eric Lepofsky: So in tougher markets, there's kind of a need to have and a nice to have, and Tempus, at least at the present moment, is kind of a need to have data for a lot of people. And I think you're right; they're probably cutting back on budgets for NYSTAP.

Speaker Change: So in tougher markets. There is kind of like nice to have a need to have.

Speaker Change: Tempus at least at the present moment is kind of need to have data for a lot of people and I think youre right theres, probably cutting back up budgets for a nice to have things.

Ryan McDonald: Really helpful, Collard. Thanks. Maybe as a follow-up, on the genomic side, you know, given all the positive news that you continue to receive in terms of reimbursement for assays from CMS, can you talk about how you're sort of going about using this in discussions with commercial payers to potentially improve reimbursement? And, you know, what sort of stage are we at in terms of the progression of those discussions? Thanks. Yeah, so I think on the commercial fare side, we're certainly on the same journey that kind of all.

Ryan MacDonald: Really helpful color. Thanks. Maybe as a follow-up, on the genomic side, you know, given all the positive news that you continue to receive in terms of reimbursement for assays from CMS, can you talk about how you're sort of going about using this in discussions with the commercial payers to potentially improve reimbursement and, you know, what sort of stage are we at in sort of the progression of those discussions? Thanks.

Speaker Change: Very helpful color. Thanks, maybe just a follow up on the genomic side given all the positive news that you continue to receive in terms of reimbursement for assays from CNS you talk about how you're sort of going about using this in discussions with the commercial payers to potentially improve reimbursement in.

Speaker Change: What sort of stage are we at in sort of the progression of those discussions.

Eric Lepofsky: Yeah, so I think on the commercial pair side, we're certainly on the same journey that kind of all sequencers have kind of followed. Getting CMS coverage is great.

Jim Rogers: Yeah. I think on the commercial payer side, we're certainly on the same journey that kind of all sequencers have kind of followed. Getting CMS coverage is great. That unlocks, and FDA approval of some of our assays, that unlocks kind of the ability to have the discussions with commercial payers. We have gone in-network with Cigna, Humana, and Aetna. We have started to make some progress, still plenty of work to be done. You know, we're having those discussions, but they just take a long time to play out. You know, over the next few quarters, we'll certainly share progress as it's made.

Speaker Change: Yeah. So I think on the commercial payer side, we're certainly on the same journey that kind of all three.

Speaker Change: <unk> kind of followed getting CMS coverage is great.

Eric Lepofsky: That unlocks an FDA approval somewhere else. That unlocks kind of the ability to have this discussion with commercial partners. We have gone and networked with Cigna, Humana, and Aetna, and so we have started to make some progress; still plenty of work to be done. And, you know, we're having those discussions, but they just take a long time to play out. So over the next few quarters, we'll certainly share progress.

Speaker Change: Logs and FDA approvals or is it that a lifetime of the ability to.

Speaker Change: Discussions with commercial payers, we have gone in network with Cigna Humana and Aetna.

Speaker Change: We have started to make some progress still plenty of work to be done.

Speaker Change: And we're having those discussions but they just take a long time to play out. So you over the next few quarters.

Speaker Change: The share of progress.

Speaker Change: Right.

Speaker Change: Yes.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining; you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for Yang Ming you may now disconnect.

Q2 2024 Tempus AI Inc Earnings Call

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