Tempus AI Lifts Liquid Biopsy Pricing Outlook to $550 ASP Uplift as Personalis Deal and AstraZeneca Foundation Model Win Reshape Growth Story
Q2 2026 earnings call, Thursday, July 30, 2026
Tempus AI delivered a quarter that executives called one of the strongest in company history, with revenue rising 22% to $382.5 million and management raising full-year guidance to $1.595 billion to $1.605 billion, implying approximately 25% growth. But the more consequential news came in a series of pricing and partnership disclosures that materially reshape the multiyear revenue trajectory, alongside confirmation of the pending Personalis acquisition in minimal residual disease testing.
Liquid Biopsy Pricing Jumps Sharply Above Prior Guidance
The single biggest surprise of the quarter was a steep upward revision to expected pricing on Tempus' liquid biopsy assay, xF, which is currently in front of the FDA. Chief Financial Officer Jim Rogers told analysts the company now expects a $550 ASP uplift once xF is approved, versus the $230 figure given at the company's Investor Day just two quarters ago using fourth-quarter data. CFO Rogers pointed to comparable assays that have recently cleared FDA review at much higher prices than Tempus had modeled. CEO Eric Lefkofsky was explicit about the benchmark driving the change: "Our assay is most comparable in terms of size, like literally size, like megabases and size totality, to Guardant's recent assay that they got approved. And I believe their ADLT pricing is something like $8,300 or $8,400. It would be very hard for us to go to the market with an almost identical assay that's radically less expensive." Mark Massaro of BTIG pressed for specifics, and Rogers confirmed Tempus is now modeling a $7,500 ADLT price for xF, which is expected to reach market in the second half of 2027. Combined with the recently approved tumor-only xT CDx, which carries an estimated $200 ASP uplift worth roughly $85 million annually starting in 2027, Lefkofsky said the two approvals together should generate approximately $400 million of revenue uplift in 2028, a figure not previously disclosed at this level of precision.
AstraZeneca Foundation Model Clears Blinded Validation
Tempus disclosed that it delivered the first version of its foundation model to AstraZeneca and that the model passed blinded acceptance testing against both AstraZeneca's own internal models and Tempus' prior specialized tools in predicting patient response across public and private clinical trials. Lefkofsky called this "a huge hurdle" and confirmed the company is now building the next iteration. Bradley Bowers of Mizuho pushed on how this affects the existing commercial relationship, and Lefkofsky clarified that the current AstraZeneca data licensing agreement runs through roughly 2028 independent of the foundation model work, with AstraZeneca already committed to projects extending into 2027 regardless of any new contract terms. The comments suggest the foundation model is being positioned as an upsell and retention tool within an already multiyear locked-in client relationship rather than a stand-alone new revenue stream, at least for now.
Personalis Deal Structure and Termination Risk Addressed
Tempus confirmed the July 20 announcement to acquire Personalis, calling minimal residual disease testing a market worth more than $20 billion and one of the fastest-growing segments in oncology diagnostics. The deal is structured as 100% stock with an option for Tempus to pay up to 50% in cash, and management said conversations are already underway to arrange debt financing to limit shareholder dilution. Kyle Mikson of Canaccord raised the sensitive question of whether Tempus' stock trading below $46 creates termination risk given an apparent pricing floor in the agreement. Lefkofsky was direct in dismissing the concern: "I can't see a scenario where they would want to terminate even if we were slightly below the floor... I just can't envision any scenario upon which this doesn't close." He noted Tempus is already a commercial partner of Personalis and that walking away would be highly disruptive to both sides. On the underlying economics, Lefkofsky offered a candid assessment of why Tempus is acquiring now rather than earlier, explaining that Personalis is nearing an inflection point where its reimbursement economics flip favorably: "The economics that are more favorable for us today because we get paid and don't lose money will actually flip, and all of a sudden they'll be getting paid, they'll have more margin, and we'll kind of wish we had that deal instead of our deal."
MRD Volumes Ramping Despite Limited Sales Force Deployment
Only about 10% of Tempus' sales force is currently selling MRD testing, yet volumes grew from roughly 6,500 tests in the first quarter to approximately 9,000 in the second, a 38% sequential increase. Management indicated it is deliberately throttling sales force expansion until per-test economics approach breakeven, drawing a direct parallel to how Tempus scaled its therapy-selection business against Foundation Medicine. Lefkofsky argued the current gross margin profile of the core business gives Tempus room to eventually fund a much larger MRD sales push without denting EBITDA or cash flow, framing it as a timing decision rather than a capacity constraint.
Data and Insights Business Adds BioNTech, Daiichi Sankyo Among Record Bookings
The data licensing and modeling business grew 36% in the quarter, and Tempus signed a new multiyear agreement with BioNTech, joining existing large pharma clients including AstraZeneca, GlaxoSmithKline, Bristol Myers Squibb, and Merck. Combined with deals signed with Daiichi Sankyo, LevelSet Bio, and Insight Pharmaceuticals, total bookings for the quarter reached approximately $200 million. Lefkofsky described the current run of deal signings as "probably the single best run of three or four quarters we've had ever," citing not just data licensing demand but growing use of Tempus' Lens platform for GPU provisioning and in-environment model building, which he framed as a stickier form of customer lock-in than pure data access.
Balance Sheet Repositioned, Path to Positive Free Cash Flow Confirmed
Tempus completed a $460 million offering of 0.0% convertible senior notes due 2032, using proceeds in part to repay an outstanding loan from Ares Capital. Management said the refinancing saves more than $30 million annually in interest expense and is expected to help the company reach positive free cash flow by year-end. Cash used in operating activities improved to negative $7.5 million for the quarter, and the company ended the period with $820.7 million in cash, cash equivalents, and marketable securities, up from $643.8 million the prior quarter. GAAP net income was $5.6 million and adjusted EBITDA reached $8 million, a $13.6 million year-over-year improvement. Full-year adjusted EBITDA guidance stands at approximately $65 million, up $72 million from 2025, with management reiterating that continued EBITDA and free cash flow improvement is expected in 2027 even after absorbing the Personalis acquisition.
Algorithm Attach Rate and Core Volume Growth
Tempus' algorithm attach rate on solid tumor testing rose to 45% in the second quarter from 40% in the first, a metric management uses to illustrate the differentiated insight layer sold alongside core diagnostic tests. Rogers noted most of these algorithms are not yet reimbursed and carry no direct revenue impact, but they are helping drive core diagnostic volume growth, which accelerated to 31% in the quarter. Hereditary cancer testing growth, by contrast, slowed to 5% as the business laps an unusually strong prior-year comparison, though management said the recently launched GenomeNext whole-genome product came in roughly 50% ahead of internal expectations within its first weeks, with early data showing no cannibalization of the existing whole-exome hereditary business.