Q4 2025 Tempus AI Inc Earnings Call

February 24, 2026

Speaker #2: At this time, all lines are in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

Speaker #2: We respectfully request that you limit questions to one. To ask a question, simply press number one on your touch-tone phone. To withdraw your question, press one again.

Speaker #2: It is now my pleasure to turn today's call over to Liz Krutoholow, Vice President of Investor Relations. Please go ahead. Thank you, Tina. Good afternoon and welcome to Tempus's fourth quarter 2025 and full year 2025 conference call.

Liz Quidachay: Thank you, Tina. Good afternoon, and welcome to Tempus's Q4 2025 and Full Year 2025 conference call. This afternoon, Tempus released results for the quarter and year ended 31 December 2025. The press release, an overview of the quarter, and our latest presentation are available on our IR website. 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 refer to our 10-K and other subsequent filings 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 #2: This afternoon, Tempus released results for the quarter and year ended December 31, 2025. The press release, an overview of the quarter, and our latest presentation are available on our IR website.

Speaker #2: 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.

Speaker #2: For discussion of these risks, please refer to our 10-K and other subsequent filings 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 #2: Definitions of these non-GAAP financial measures along with reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, which is available on our IR page.

Liz Quidachay: Definitions of these non-GAAP financial measures, along with reconciliations to the most directly comparable GAAP financial measures, are included in our earnings release, which is available on our IR page. I would now like to turn the call over to Eric.

Speaker #2: I would now like to turn the call over to Eric.

Speaker #3: Thanks, Liz. 2025 was an exceptional year for Tempus. With both of our businesses growing rapidly and performing well above expectations, total revenue of our core business was up over 33%. When you factor in the acquisition of Ambri, obviously much higher.

Eric Lefkofsky: Thanks, Liz. 2025 was an exceptional year for Tempus, with both of our businesses growing rapidly and performing well above expectation. Total revenue of our core business was up over 33%. When you factor in the acquisition of Ambry, obviously much higher. If you look at our two main businesses, I'll start with diagnostics. In oncology, we had unit growth of 29%, which was, and has been accelerating throughout the year. We called out that our MRD growth rate was actually 56% quarter-over-quarter, which is extraordinary. Hereditary held up well with 23% unit growth. All in our diagnostic business is accelerating and performing above expectation. In terms of data, that business is growing even faster. It's made up of really two product lines, our licensing business and our applications.

Speaker #3: If you look at our two main businesses, I'll start with diagnostics and oncology; we had unit growth of 29%, which was, and has been, accelerating throughout the year.

Speaker #3: We called out that our MRD growth rate was actually 56% quarter over quarter, which is extraordinary. Hereditary held up well with 23% unit growth, so all in our diagnostic business is accelerating and performing above expectation.

Speaker #3: In terms of data, that business is growing even faster; it's made up of really two product lines: our licensing business and our applications. Our licensing business, our insights, was up 69% in the quarter when you factor in the one-time impact of the AstraZeneca warrant.

Eric Lefkofsky: Our licensing business or insights, was up 69% in the quarter when you factor in the one-time impact of the AstraZeneca warrant, and we're projecting roughly 40% growth this quarter. Total contract value was greater than $1.1 billion, and most importantly, has been rising faster than revenue over the past several quarters. Net revenue retention was 126%, which is super strong, all things considered. We guided to $1.59 billion, which is in line with our 25% our growth expectations and approximately $65 million of positive adjusted EBITDA. Our balance sheet is in great shape. Our products are resonating. Our AI advantages are continuing to take hold, so all in, we're poised for a phenomenal 2026. With that, happy to take questions.

Speaker #3: And we're projecting roughly 40% growth this quarter. Total contract value was greater than $1.1 billion, and most importantly, has been rising faster than revenue over the past several quarters.

Speaker #3: And net revenue retention was 126%, which is super strong, all things considered. We guided to $1.59 billion, which is in line with our 25% long-term growth expectations, and approximately $65 million of positive adjusted EBITDA.

Speaker #3: Our balance sheet is in great shape. Our products are resonating. Our AI advantages are continuing to take hold. So, all in, we're poised for a phenomenal 2026.

Speaker #3: With that, happy to take questions.

Tina: As a reminder, to ask a question, simply press star one on your telephone keypad. Our first question comes from Tejas Savant with Morgan Stanley. Please go ahead.

Operator: As a reminder, to ask a question, simply press star one on your telephone keypad. Our first question comes from Tejas Savant with Morgan Stanley. Please go ahead.

Speaker #4: As a reminder to ask a question, simply press star one on your telephone keypad. And our first question comes from Callen Tichmarsh with Morgan Stanley.

Speaker #4: Please go ahead.

Speaker #5: Yeah, thanks a lot for the question, guys. Eric, I wanted to zoom out from the financials. I'm sure that'll be covered and go a bit broader.

Tejas Savant: Yeah, thanks a lot for the question, guys. Eric, I wanted to zoom out from the financials. I'm sure that'll be covered and go a bit broader. You know, the markets are a bit anxious around AI and how value is getting distributed within that ecosystem, and we're now obviously seeing kind of traditional AI players push into the healthcare sphere. I'm curious how you feel your position is protected on the data side. I guess to that point, why you expect the large pharma companies you work with, particularly within insights, to keep coming back for more. You know, the Q1 guide is obviously strong, but I'm kind of looking on that.

Speaker #5: You know, the markets are a bit anxious around AI and how value is getting distributed within that ecosystem. And we're now obviously seeing kind of traditional AI players push into the healthcare sphere.

Speaker #5: So I'm curious how you feel your position is protected on the data side. And I guess to that point, why are you expect the large pharma companies you work with, particularly with an insight, to keep coming back for more?

Speaker #5: You know, the Q1 guides obviously strong, but I'm kind of looking on that. And then finally, just on that point, I'm interested whether the feedback you're receiving from these customers suggests that they're getting better at what they do because of what you're providing them with.

Tejas Savant: Finally, just on that point, I'm interested whether the feedback you're receiving from these customers suggests that they're getting better at what they do because of what you're providing them. Just, you know, any sense of success stories and what you're hearing on the ground would be appreciated. Thanks a lot.

Speaker #5: Just, you know, any sense of success stories and what you're hearing on the ground would be appreciated. Thanks a lot.

Speaker #3: Yeah, so I mean, I think the most interesting business models I believe surrounding AI, in particular large language or large multimodal models, really center around access to proprietary data to train models, and proprietary distribution once you have a model that generates insight.

Eric Lefkofsky: I mean, I think the most interesting business models I believe surrounding AI, in particular, large language or large multimodal models, really center around access to proprietary data to train models and proprietary distribution once you have a model that generates insight. As we've talked about historically, Tempus is uniquely positioned in that we have both of those at scale. We have over 450 petabytes of connected multimodal data, which flows from our diagnostic business, which has real-time insights, real-time connection to outcome and response, is able to track patients longitudinally, rich molecular data, rich imaging data. We have this really unique proprietary data set that you can use to train AI, to train models.

Speaker #3: So, as we've talked about historically, Tempus is uniquely positioned in that we have both of those at scale. We have over 450 petabytes of connected, multimodal data, which flows from our diagnostic business, which has real-time insights; real-time connection to outcome and response; is able to track patients longitudinally; rich molecular data, rich imaging data.

Speaker #3: So, we have this really unique proprietary data set that you can use to train AI to train models. And then, once we generate insights or some kind of contextualization that we want to put in the hands of a doctor—because we're connected to more than 5,500 hospitals, because we have more than 8,500 regularly ordering oncologists, and, you know, thousands of other physicians in other areas—we can deliver these insights in real time as part of routine clinical care.

Eric Lefkofsky: Once we generate insights or some kind of contextualization that we want to put in the hands of a doctor, because we're connected to more than 5,500 hospitals, because we have more than 8,500 regularly ordering oncologists and, you know, thousands of other physicians in other areas, we can deliver these insights in real time as part of routine clinical care. That's what makes us unique. If somebody wanted to replicate our data business, they'd have to go reproduce all that real-time data, which is quite hard to do. You have to enter into contracts with providers. You have to get the data. You have to work through IT issues. You have to structure the data. You have to build technology to make the data useful.

Speaker #3: So that's what makes us unique—that if somebody wanted to replicate our data business, they'd have to go reproduce all that real-time data, which is quite hard to do.

Speaker #3: You have to enter into contracts with providers. You have to get the data. You have to work through IT issues. You have to structure the data.

Speaker #3: You have to build technology to make the data useful. It's an enormous lift that we've been on over the last 10 years. And I think because of that, because of the work we've done, to build the data pipes, to harmonize and structure the data, to build technology that wraps around the data, we just have a unique offering.

Eric Lefkofsky: It's an enormous lift that we've been on over the last 10 years. I think because of that, because of the work we've done to build the data pipes, to harmonize and structure the data, to build technology that wraps around the data, we just have a unique offering, and other people have been unable to replicate it. If you look at our the scale of our data business, I mean, you know, a few years ago, people thought we couldn't hit $100 million of data revenue, and we're now, you know, 4 times that and projecting to grow 40% even at this scale.

Speaker #3: And other people have been unable to replicate it. And so if you look at the scale of our data business, I mean, you know, a few years ago people thought we couldn't hit $100 million of data revenue.

Speaker #3: And we're now, you know, four times that. And projecting to grow 40% even at this scale, we have 126% net revenue retention, which means on average our clients are ordering significantly more year after year than they ordered the year before.

Eric Lefkofsky: We have 126% net revenue retention, which means, on average, our clients are ordering significantly more year after year than they ordered the year before. All kinds of proof points. Our largest clients continue to re-up. Those contracts get extended. We've announced a bunch of them over the last several years. It's because our data is demonstrating real value, where these clients are able to use our data and our technology to be more intelligent about what assets to go forward with, refine their early stage discovery of, you know, projects, design more intelligent phase 2s and phase 3s, recruit the right populations at the right time, and get their drugs approved and in market faster. That is why the data business is just kind of having a moment, and the growth is actually accelerating.

Speaker #3: And all kinds of proof points. Our largest clients continue to re-up. Those contracts get extended. We've announced a bunch of them over the last several years.

Speaker #3: And it's because we're demonstrating real our data is demonstrating real value where these clients are able to use our data and our technology to be more intelligent about what assets to go forward with, refine their early-stage discovery projects, design more intelligent phase twos and phase threes, recruit the right populations at the right time, and get their drugs approved and in market faster.

Speaker #3: And that is why the data business is just kind of having a moment, and the growth is actually accelerating.

Speaker #4: Your next question comes from the line of Sabu Namabi with Guggenheim. Please go ahead.

Tina: Your next question comes from the line of Subbu Nambi with Guggenheim. Please go ahead.

Operator: Your next question comes from the line of Subbu Nambi with Guggenheim. Please go ahead.

Speaker #6: Hey guys, thank you for taking my question. Earlier in 1Q, you launched PaidProduct. Given the previously discussed that you don't expect this to contribute meaningfully to revenue this year, can you discuss the strategic value of the added capability when samples are Q&As?

Subbu Nambi: Hey, guys. Thank you for taking my question. Earlier in Q1, you launched Paige Predict. Given you previously discussed that you don't expect this to contribute meaningfully to revenue this year, can you discuss the strategic value of the added capability when samples are QNS? How often is this case with HRD and xR? A quick one for Jim. Jim, ASPs are expected to reach over $2,200 in the coming years, but what are you expecting in 2026 guidance? Thank you so much.

Speaker #6: How often is this case with XT and XR? And a quick one for Jim. Jim, ASPs are expected to reach over 2,200 in the coming years, but what are you expecting in 26 guidance?

Speaker #6: Thank you so much.

Speaker #5: Yeah, so I'll start with PaidProduct. So you know, we have and I think I'd encourage you to read the letter we tried to spell some of this out in the letter we published.

Eric Lefkofsky: Yeah, I'll start with Paige Predict. You know, we have. We, and I think I'd encourage you to read the letter. We try to spell some of this out in the letter we published. We've long talked about how there's enormous benefits to the contextualization of these diagnostics and the technology we wrap around them. It's not just about having, you know, the next version of an assay or running a study that produces, you know, some kind of wet lab improvement. Like, that only means so much.

Speaker #5: But we've long talked about how there's enormous benefits to the contextualization of these diagnostics and the technology we wrap around them. And it's not just about having you know, the next version of an assay or running a study that produces some kind of wet lab improvement.

Speaker #5: Like, that only means so much. If you look at our growth and the fact that our growth is this strong at this scale, it's in large part driven by the fact that we just have a technology advantage that makes physicians want to order our products because they get greater insights from those products.

Eric Lefkofsky: If you look at our growth and the fact that our growth is this strong at this scale, it's in large part driven by the fact that we just have a technology advantage that makes physicians want to order our products because they get greater insights from those products. Those insights, we'd like, if you look at a few that we called out, one is Paige Predict, another is what we call our Immune Profile Score, and there are dozens of others. If you look at Paige Predict, here's an example of we've built technology that, at scale, allows us to digitize pathology slides and generate insights from those pathology slides by which we can predict mutations that exist that will show up when we do the next-generation sequencing.

Speaker #5: And those insights, like if you look at just a few that we called out, one is PaidProduct, another is what we call our immune profile score.

Speaker #5: And there are dozens of others. But if you look at PaidProduct, here's an example of where we've built technology that, at scale, allows us to digitize pathology slides and generate insights from those pathology slides by which we can predict mutations that exist, that will show up when we do the next-generation sequencing.

Speaker #5: The benefit of having a system where you're sequencing tons of patients and following mutations, and you're digitizing pathology slides and tracking those, is you can begin to correlate these things.

Eric Lefkofsky: The benefit of having a system where you're sequencing tons of patients and following mutations, and you're digitizing pathology slides and tracking those, is you can begin to correlate these things. All next-generation sequencing has some amount of error. It's just inherent to the process of using Illumina and other sequencing companies, where you don't get 100% output when you sequence a patient. Some percentage of the time, it's a small percent, but some percentage of the time you have results that can't be returned to a physician. Being able to digitize a pathology slide and render insights, even when sequencing fails, just makes our tests a little better than somebody else. The fact that we can also render those results in hours makes us a little faster to deliver those insights.

Speaker #5: All next generation sequencing has some amount of error. It's just inherent to the process of using Illum and other sequencing companies where you don't get 100% output when you sequence a patient.

Speaker #5: So some percentage of the time, it's a small percent, but some percentage of the time you have results that can't be returned to a physician.

Speaker #5: Being able to digitize a pathology slide and render insights even when sequencing fails just makes our tests a little better than somebody else. The fact that we can also render those results in hours makes us a little faster to deliver those insights.

Speaker #5: So at the same time, if you look at our immune profile score, we're able to look at lots of different multimodal data we generate.

Eric Lefkofsky: It's the same thing if you look at our Immune Profile Score. We're able to look at lots of different multimodal data we generate. Could be digitized pathology slides, could be transcriptomic data from RNA, could be DNA data, and refine what have historically been traditional biomarkers, like tumor mutational burden or others. Each of these insights that we can generate, again, it's not that one of them alone is the reason that a physician would use us, but they just keep stacking up. If you look at the foundation model efforts that we're engaged in, that's gonna do nothing, we think, but accelerate that dramatically.

Speaker #5: It could be digitized pathology slides, could be transcriptomic data from RNA, could be DNA data. And refine what have historically been traditional biomarkers like tumor mutational burden, or others.

Speaker #5: And each of these insights that we can generate, again, it's not that one of them alone is the reason that a physician would use us, but they just keep stacking up.

Speaker #5: And if you look at the foundation model efforts that we're engaged in, that's going to do nothing we think but accelerate that dramatically. And so to the extent today that we're X percent better than somebody else because we can generate Y percent more insights, you should expect that to grow quite a bit over the next several years.

Eric Lefkofsky: To the extent today that we're, you know, X% better than somebody else because we can generate Y% more insights, you know, you should expect that to grow quite a bit over the next several years.

Speaker #5: And then in response to the ASP question, so ASPs in Q4 were around $1,640. That was up about $40 quarter over quarter.

Jim Rogers: In response to the ASP question, ASPs in Q4 were around $1,640. That was up about $40, quarter-over-quarter. As you noted in our investor deck and kind of what was discussed at JPM, is we think that there's about $500 or greater than $500 of upside to ASP based on the current mix, driven by a couple of factors. One is the continued migration of xT CDx from the LDT version to the FDA-approved version. As we previously stated, that we plan by the end of 2026 to be exiting with the vast majority of volume on that FDA-approved version. That's kind of the biggest impact from an ASP perspective in 2026.

Speaker #5: As you noted in our investor deck and kind of what was discussed at GPM, is we think that there's about 500 dollars or greater than 500 dollars of upside to ASP based on the current mix.

Speaker #5: Driven by a couple of factors. One is the continued migration of XT CDX from the LDT version to the FDA-approved version. As we previously stated, that we plan by the end of 2026 to be exiting with the vast majority of volume on that FDA-approved version.

Speaker #5: So that's kind of the biggest impact from an ASP perspective in 2026. We also announced that we've submitted our XF, which is our liquid biopsy, to the FDA.

Jim Rogers: We also announced that we've submitted our xF, which is our liquid biopsy, to the FDA. That will unlikely to have much of a 2026 impact from ASP, but as we get into 2027, we'll start to contribute. Lastly, there's still some upside from commercial payers, as we kind of chip away at those. That's kind of the build. Those three initiatives kind of get you that upside of $500, with xT CDx being the biggest driver, and that will play out over the course of 2026.

Speaker #5: That will, unlikely to have much of a '26 impact from ASP, but as we get into '27, we'll start to contribute. And then lastly, there's still some upside from commercial payers as we kind of chip away at those.

Speaker #5: So that's kind of the build those three initiatives kind of get you that upside of 500 dollars with XT CDX being the biggest driver.

Speaker #5: And that will play out over the course of 2026.

Speaker #4: Your next question is from the line of Ryan McDonald with Needham & Company. Please go ahead.

Tina: Your next question is from the line of Ryan McDonald with Needham and Company. Please go ahead.

Operator: Your next question is from the line of Ryan MacDonald with Needham and Company. Please go ahead.

Speaker #7: All right, thanks for taking my questions. So my question for Eric you just sort of talked about the foundation model and how that can sort of exponentially sort of help the stacking initiative and sort of development of additional algorithms, different additional modules over time.

Ryan McDonald: All right, thanks for taking my questions. You know, my question for Eric, you know, you just sort of talked about the foundation model and how that can sort of exponentially sort of help the stacking initiative and sort of development of additional algorithms, different additional modules over time. Can you just give us an update on sort of where things sort of stand on the development of that foundation model? I think you mentioned last quarter, you were hoping to have the first version of the model ready in Q1 2026 here, and just curious if that's launched yet, how it's performing relative to expectations?

Speaker #7: Can you just give us an update on sort of where things sort of stand on sort of the development of that foundation model? I think you mentioned last quarter you were hoping to have the first version of the model ready in the first quarter of 26 here.

Speaker #7: And so just curious if that's launched yet, how it's performing relative to expectations. And then for Jim, just curious in terms of you talked about ASPs just now, but just curious how you're thinking about sort of underlying assumptions for volume growth across oncology in particular, but hereditary as well in the 26 guide.

Ryan McDonald: You know, for Jim, just curious in terms of, you talked about ASPs just now, but just curious about how you're thinking about sort of underlying assumptions for volume growth across oncology in particular, but hereditary as well, in the 2026 guide. Thanks.

Speaker #7: Thanks.

Speaker #5: Yeah, so I'll start. The foundation model had a deliverable in Q1 where we had to hit certain benchmarks that AstraZeneca had established. We think we've hit all those benchmarks.

Eric Lefkofsky: Yes, I'll start. The foundation model had a deliverable in Q1, where we had to hit certain benchmarks that AstraZeneca had established. We think we've hit all those benchmarks. We've submitted all that to AZ. They're testing the model now. We feel great about the model's performance. Those efforts will go on. That was a particular cluster we set up of about a little over 1,000 H200s dedicated to that oncology foundation model. We've also procured a second cluster of more than 500 GB200. In terms of actual compute power, it's greater than the first cluster.

Speaker #5: We've submitted all that to AZ. They're testing the model now, but we feel great about the model's performance. And so those efforts will go on.

Speaker #5: We've also—that was a particular cluster we set up of about a little over 1,000 H200s dedicated to that oncology foundation model. We've also procured a second cluster of more than 500 GB200s.

Speaker #5: So in terms of actual compute power, it's greater than the first cluster. And we're running additional models internal, not just in oncology, but across all of our data because we have enormous amounts of radiology data and pathology data and cardiology data and neuropsych and so on and so forth.

Eric Lefkofsky: We're running additional models internal, not just in oncology, but across all of our data, 'cause we have enormous amounts of radiology data and pathology data and cardiology data, neuropsych, and so on and so forth. We're, you know, incredibly long on the value that these models are gonna deliver, and we're, you know, doubling down on those efforts. We think they'll be catalytic both to our diagnostic business, as we keep dropping insights into our tests that make our tests smarter and better than others, and so that should be an accelerant to growth. We also intend to propagate these insights throughout our data business so that our clients get more value.

Speaker #5: So we're incredibly long on the value that these models are going to deliver, and we're doubling down on those efforts. We think they'll be catalytic both to our diagnostic business, as we keep dropping insights into our tests that make our tests smarter and better than others.

Speaker #5: And so that should be an accelerant to growth. And then we also intend to propagate these insights throughout our data business so that our clients get more value.

Speaker #5: Yeah, and then in terms of the kind of underlying volume assumptions in the diagnostics business, oncology as Eric mentioned had 29% growth in Q4.

Jim Rogers: Yeah, in terms of the kind of underlying volume assumptions in the diagnostics business, you know, oncology, as Eric mentioned, had 29% growth in Q4. The Q1, you know, is off to a good start, we're not seeing kind of that pace slow down. On the hereditary side, volume growth was 23% in Q4. As we've talked about previously, what we highlight in the letter is we do anticipate that continuing to moderate as we lap some of the share gains that they had. There likely will also be some lumpiness in the hereditary growth rates in 2026. In the letter, we've called out, you know, kind of this high teens, you know, longer term growth rates.

Speaker #5: The first quarter is off to a good start, and so we're not seeing that pace slow down on the hereditary side. Volume growth was 23% in Q4, as we've talked about previously, and what we highlight in the letter is we do anticipate that continuing to moderate as we lap some of the share gains that they had.

Speaker #5: There likely will also be some lumpiness in the hereditary growth rates in 2026. And so in the letter, we've called out kind of this high teens longer-term growth rates.

Jim Rogers: It might be a little bit lower in Q1 and then kind of pick up throughout the year. There'll probably be some lumpiness, but we think that that high teens is still, you know, achievable. Oncology, you know, again, we feel really strong about where the oncology business is at. On the hereditary side, you know, again, we were anticipating some of this slowdown, giving the lapping of some of the share gains.

Speaker #5: It might be a little bit lower in Q1, and then kind of pick up throughout the year. There'll probably be some lumpiness, but we think that that high-teens is still achievable.

Speaker #5: So oncology again, we feel really strong about where the oncology business is at. And on the hereditary side, again, it was we were anticipating some of this slowdown giving the lapping of some of the share gains.

Speaker #4: Your next question comes from the line of Mark Massaro with BTIG. Please go ahead.

Tina: Next question comes from the line of Mark Massaro with BTIG. Please go ahead.

Operator: Next question comes from the line of Mark Massaro with BTIG. Please go ahead.

Speaker #7: Hey guys, congrats on a strong year and thanks for taking my questions. So, I think in your letter you talk about MRD volumes came in.

Mark Massaro: Hey, guys. Congrats on a strong year, thanks for taking my questions. I think in your letter, you talk about MRD volumes came in around 4,700 tests in the quarter, and I think you made a reference that that level could have been 20 times higher if the entire sales force had been selling it. Am I understanding it correctly, that approximately 5% of your sales force was selling MRD in Q4? Is the right way to interpret this that, you know, if everyone sold it could be 20x higher in the Q4, or was the 20x higher, more of an aspirational, longer term outlook?

Speaker #7: Around 4,700 tests in the quarter. And I think you made a reference that that level could have been 20 times higher if the entire sales force had been selling it.

Speaker #7: So, am I understanding it correctly that approximately 5% of your sales force was selling MRD in Q4? And is the right way to think about it that it could be 20x higher in Q4?

Speaker #7: Or was the 20x higher more of an aspirational longer-term outlook?

Speaker #5: Yeah, I mean, so it's obviously just a hypothetical, so it's impossible to say what could have happened in Q1. We were simply highlighting the really unbelievable strength of our MRD offering, with the main vector being that we ran 4,700 tests.

Eric Lefkofsky: Yeah, I mean, Obviously, it's just a, it's a hypothetical, so it's impossible to say what could have happened in Q1. We were simply highlighting the really unbelievable strength of our MRD offering on, you know, the main vector being we ran 4,700 tests. It's 56% quarter-over-quarter, not year-over-year, quarter-over-quarter growth, and we are highly constraining this effort. Yes, we have a very small percentage of our cumulative sales force that is currently selling MRD, and if we were to let everyone sell it and completely unblock it could be 20 times higher. Now, whether it would be, obviously, you know, you only know that when you unblock it.

Speaker #5: It's 56% quarter over quarter, not year over year, but quarter over quarter growth. And we are highly constraining this effort. And so yes, we have a very small percentage of our cumulative sales force that is currently selling MRD.

Speaker #5: And if we were to let everyone sell it and completely unblock it, it could be 20 times higher. So now, whether it would be—obviously, you only know that when you unblock it.

Speaker #5: But our point is, the growth is just really amazingly strong with a highly constrained sales effort. Now, we will eventually unblock that sales effort.

Eric Lefkofsky: Our point is, the growth is just really amazingly strong with a highly constrained sales effort. Now, we will eventually unblock that sales effort. It's a function of reimbursement, it's a function of the appropriate timing, but we intend to, over time ungate this and be in market fully. It, you know, it took other companies that have really strong reimbursement, like, for example, Natera, it took them quite some time to establish coverage in a broad enough way that this made financial sense. We're fortunate that we can kind of ungate this in an intelligent, appropriate manner and not kind of wreak financial havoc.

Speaker #5: It's a function of reimbursement. It's a function of the appropriate timing. But we intend to over time ungate this and be in market fully.

Speaker #5: It took other companies that have really strong reimbursement, like, for example, Natera, quite some time to establish coverage in a broad enough way that this made financial sense.

Speaker #5: We're fortunate that we can kind of ungate this in an intelligent, appropriate manner and not wreak financial havoc. But what we are calling out is, when you look at our diagnostic platform—which is obviously broadly connected for hereditary profiling, broadly connected for therapy selection, both in solid tumor profiling and liquid biopsy—when you look at the number of EHR connections we have and the number of integrations we have, and the number of feet we have on the street, deeply embedded within the workflows of such a large percentage of the U.S. oncology market, I would suspect, when we ungate this, we will become a very large MRD supplier.

Eric Lefkofsky: What we are calling out is when you look at our diagnostic platform, which is, you know, obviously broadly connected for hereditary profiling, broadly connected for therapy selection, both in solid tumor profiling and liquid biopsy. When you look at the number of EHR connections we have, and the number of integrations we have, and the number of feet we have on the street, deeply embedded within the workflows of such a large percentage of the US oncology market, I would suspect when we ungate this, we will become a very large MRD supplier.

Speaker #4: Your next question comes from the line of Kyle Nixon with Canaccord Genuity. Please go ahead.

Tina: Your next question comes from the line of Kyle Mikson with Canaccord Genuity. Please go ahead.

Operator: Your next question comes from the line of Kyle Mikson with Canaccord Genuity. Please go ahead.

Speaker #8: Hi, this is Alistair Kiss on the line for Kyle Nixon. Thank you for taking our questions. So, just taking a step back, in oncology, I was wondering if you could provide a bit more clarity on your tests.

Jim Rogers: Hi, it's Austin Casey on the line for Kyle Mikson. Thank you for taking our questions. Just taking a step back, in oncology, I was wondering if you could provide a bit of more clarity on your tests. You briefly touched on ASP and volume dynamics, but could you just kind of walk through what each of the main growth drivers will be for xT, xR, xF, xH, and xE in 2026 and beyond? Thank you.

Austin Casey: Hi, it's Austin Casey on the line for Kyle Mikson. Thank you for taking our questions. Just taking a step back, in oncology, I was wondering if you could provide a bit of more clarity on your tests. You briefly touched on ASP and volume dynamics, but could you just kind of walk through what each of the main growth drivers will be for xT, xR, xF, xH, and xE in 2026 and beyond? Thank you.

Speaker #8: They briefly touched on AST and volume dynamics, but could you just kind of walk through what each of the main growth drivers will be for XT, XR, XF, XH, and XE in 2026 and beyond?

Speaker #8: Thank you.

Eric Lefkofsky: You mean, I don't even know how to answer that question. It's a fairly broad question, but I would say, in the letter we call out, I think our main platform advantage that has been kind of fueling our growth. That platform advantage, the fact that we contextualize diagnostics, the fact that we're mirroring clinical data with molecular data, the fact that we have such a comprehensive profile, the insights we can generate by virtue of that advantage exists in xT, which is our DNA profiling. It exists in xR, which is our RNA profiling. It exists in xA, xF, which are liquid biopsies.

Speaker #5: I don't even know how to answer that question. It's a fairly broad question. But I would say, in the letter, we call out, I think, our main platform advantage that has been kind of fueling our growth.

Speaker #5: That platform advantage the fact that we contextualize diagnostics, the fact that we're marrying clinical data with molecular data, the fact that we have such a comprehensive profile, the insights we can generate by virtue of that, that advantage exists in XT, which is our DNA profiling.

Speaker #5: It exists in XR, which is our RNA profiling. It exists in X8, SF, which are liquid biopsies. It exists in XH, which is our heme offering, which by the way, we have a whole genome heme offering that goes live this year.

Eric Lefkofsky: It exists in xH, which is our heme offering, which, by the way, we have a whole genome heme offering that goes live this year, and it exists in xE, which is our whole exome offering. It's across our entire platform. It's not as if we've got, like, one driver driving DNA and another driver driving RNA. Our core technology advantage drives the growth of all five of those assays.

Speaker #5: And it exists in XE, which is our whole exome offering. So it's across our entire platform. So it's not as if we've got one driver driving DNA and another driver driving RNA.

Speaker #5: Our core technology advantage drives the growth of all five of those assays.

Speaker #6: And the other thing I would add is, obviously, the market itself is also growing. And so, amongst our peers, everyone is experiencing kind of healthy growth rates.

Jim Rogers: The other thing I would add-

Eric Lefkofsky: Yeah.

Jim Rogers: is, obviously, the market itself is also growing. You know, amongst our peers, everyone is experiencing kind of healthy growth rates. Clearly, sequencing is becoming more prevalent amongst our ordering physicians and ultimately, patients. As Eric noted, kind of that data advantage is what allows us to kind of capture additional market share.

Speaker #6: So clearly, sequencing is becoming more prevalent amongst our ordering physicians and, ultimately, patients. And as Eric noted, that data advantage is what allows us to capture additional market share.

Speaker #5: Yeah, with us, obviously in solid tumor growing, it looks like at this point faster than others.

Eric Lefkofsky: Yeah. With us, obviously, in solid tumor growing, you know, it looks like at this point, faster than others.

Speaker #6: Yeah.

Speaker #4: Your next question comes from the line of Casey Woodring with JPMorgan. Please go ahead.

Tina: Our next question comes from the line of Casey Woodring with JP Morgan. Please go ahead.

Operator: Our next question comes from the line of Casey Woodring with JP Morgan. Please go ahead.

Jim Rogers: Hey, thank you for taking my questions. Can you walk us through what the guide embeds for data and services revenue in 2026? I know that you pointed to $350 million of current TCV being tied to 2026. Can you just talk about the visibility into in-year bookings to get to that guide and the timing around that? Then maybe as just a follow-up, can you split out the guide of the 40% growth you're assuming in data in Q1? Maybe just talk through how that will shake out across insights and trials, and any contribution embedded from the current foundation model with Pathos and AstraZeneca. Thank you.

Casey Woodring: Hey, thank you for taking my questions. Can you walk us through what the guide embeds for data and services revenue in 2026? I know that you pointed to $350 million of current TCV being tied to 2026. Can you just talk about the visibility into in-year bookings to get to that guide and the timing around that? Then maybe as just a follow-up, can you split out the guide of the 40% growth you're assuming in data in Q1? Maybe just talk through how that will shake out across insights and trials, and any contribution embedded from the current foundation model with Pathos and AstraZeneca. Thank you.

Speaker #7: Hey, thank you for taking my questions. Can you walk us through what the guide embeds for data and services revenue in 2026? I know that you pointed to 350 million of current TCV being tied to 26.

Speaker #7: So can you just talk about the visibility into in-year bookings to get to that guide and the timing around that? And then maybe as just a follow-up, can you split out the guide of the 40% growth you're assuming in data in one queue?

Speaker #7: Maybe just talk through how that will shake out across Insights and Trials, and any contribution embedded from the current foundation model with PathOS and AstraZeneca.

Speaker #7: Thank you.

Speaker #5: So, as we called out—I think during the JPM conference—the bookings have been so strong that we start the year with greater visibility into the 2026 revenue build than we've ever had, by a long shot.

Eric Lefkofsky: As we called out, I think, during the JPM conference, the bookings have been so strong that we start the year with greater visibility into the 2026 revenue build than we've ever had, by a long shot. We called out again at JPM, that it is normal for us to generate about $100 million of revenue within a given year from bookings in the year, meaning we, you know, somebody wanted data and we delivered it within the year.

Speaker #5: So we called out again at JPM that it is normal for us to generate about $100 million of revenue within a given year from bookings in the year, meaning somebody wanted data and we delivered it within the year.

Speaker #5: So the fact that we have such a high percentage of our revenue already committed for 2026 means that we expect to be doing our best to manage the growth of the data business, because it has just such systemic growth drivers going into 2026.

Eric Lefkofsky: The fact that we have such a high percentage of our revenue already committed for 2026 means that we expect to be, you know, doing our best to manage the growth of the data business because it has just such systemic growth drivers going into 2026, and that's directly a correlation between bookings and revenue. We just have greater than $1.1 billion in the tank. A bunch of that applies to 2026. We just are starting the year super strong, and we just have got crazy amounts of demand for our data products. Feels like we are in a unique spot in that, we're just pulling further and further away from the competition. That business just is having a moment.

Speaker #5: And that's directly a correlation between bookings and revenue. We just have greater than 1.1 billion in the tank, a bunch of that applies to 2026.

Speaker #5: And so we just are starting the year super strong, and we just have got crazy amounts of demand for our data products. Feels like we are in a unique spot in that we're just pulling further and further away from the competition.

Speaker #5: So that business just is having a moment. And as it relates to how the rest of it stacks up, the vast majority of our data and apps is data licensing.

Eric Lefkofsky: As it relates to, like, how the rest of it stacks up, the, you know, the vast majority of our data and apps is data licensing. It represents the biggest chunk of it. Everything else is kind of relatively small, but it all adds up to the other piece, and that's our clinical trial matching business TIME, our care gap product called Next, and a few of the ancillary products that are connected to that.

Speaker #5: It represents the biggest chunk of it, and so everything else is kind of relatively small, but it all adds up to the other piece.

Speaker #5: And that's our clinical trial matching business time, our caregap product called Next, and a few of the ancillary products that are connected to that.

Speaker #4: Our next question comes from the line of Doug Shincale with Wolf Research. Please go ahead.

Tina: Our next question comes from the line of Doug Schenkel with Wolfe Research. Please go ahead.

Operator: Our next question comes from the line of Doug Schenkel with Wolfe Research. Please go ahead.

Speaker #9: Hi, thank you for the question. This is Colleen on for Doug. So, you delivered high quantities of clinical oncology volume growth exiting 2025. How should we think about the durability of that volume growth into this year and next?

Colleen: Hi, thank you for the question. This is Colleen on for Doug. You delivered high 20s clinical oncology volume growth exiting 2025. How should we think about the durability of that volume growth into this year and next? How should we be thinking about liquid versus tissue CGP growth throughout this year? Any color you can share on repeat testing with XF, and if we should continue to think about XF being about 25% of total clinical oncology volume going forward.

Colleen Babington: Hi, thank you for the question. This is Colleen on for Doug. You delivered high 20s clinical oncology volume growth exiting 2025. How should we think about the durability of that volume growth into this year and next? How should we be thinking about liquid versus tissue CGP growth throughout this year? Any color you can share on repeat testing with XF, and if we should continue to think about XF being about 25% of total clinical oncology volume going forward.

Speaker #9: And how should we be thinking about liquid versus tissue CGP growth throughout this year? Any color you can share on repeat testing with XF?

Speaker #9: And if we should continue to think about XF being about 25% of total clinical oncology volume going forward?

Speaker #6: Yeah, this all started in Eric. You can chime in. So in terms of the 29% growth and how that stacks up, again, as I mentioned before, kind of we're off to a good start in the first quarter here and so we don't see a massive slowdown in the oncology growth rates.

Jim Rogers: Yeah, I'll start, and then, Eric, you can chime in. You know, in terms of the 29% growth and how that stacks up, again, as I mentioned before, kind of, we're off to a good start in the Q1 here, and, you know, we don't see a massive slowdown in the oncology growth rates. Obviously, you're getting to larger and larger scales, it's tough to continue growing at the same rate, but we're off to a good start. In terms of the breakdown, you know, outside of MRD growing dramatically faster than the rest of the portfolio, we see strong growth across both xT and xF. You know, xF may be growing slightly faster than solid, but not... You know, there's not a dramatic variation there.

Speaker #6: Obviously, you're getting to larger and larger scales. So there it's tough to continue growing at the same rate. But we're off to a good start.

Speaker #6: In terms of the breakdown, outside of MRD growing dramatically faster than the rest of the portfolio, we see strong growth across both XT and XF.

Speaker #6: XF may be growing slightly faster than solid, but there's not a dramatic variation there. And we don't see that kind of trend. That's a trend that we've seen for quite some time.

Jim Rogers: We don't see kind of that trend. That's a trend that we've seen for quite some time. We don't see a lot of variation in kind of the product mix, as we look in 2026.

Speaker #6: So we don't see a lot of variation in kind of the product mix as we like in '26.

Speaker #5: Yeah, and I'll just add to that. So our guide implies 25% growth year over year. We've called out that our hereditary business is growing slower.

Eric Lefkofsky: I'll just add to that. Our guide implies 25% growth year-over-year. We've called out that our hereditary business is growing slower. It's, you know, kind of like for the year, we think kind of high teens, mid to high teens, around that range. We have a few other businesses that we historically have called out are also not growing. Like, for example, we've de-emphasized, we have a little, relatively small, but maybe $20 million CRO business that we don't spend time on, things of that nature.

Speaker #5: That's kind of like for the year, we think kind of high teens, mid-high teens, somewhere in that range. And we have a few other businesses that we historically have called out are also not growing.

Speaker #5: For example, we've de-emphasized we have a little relatively small, but maybe $20 million CRO business that we don't spend time on, things of that nature.

Speaker #5: So you have a little bit of revenue with Ambrion, a decent amount of revenue that's growing kind of significantly less than 25%, which means that our data business and our core oncology diagnostic business are growing 30 plus percent.

Eric Lefkofsky: You have a little bit of revenue with Ambry, decent amount of revenue that's growing kind of significantly less than 25%, which means that our data business and our core oncology diagnostic business are growing 30%+, right? Just as we told the world, we expected to grow at 30% or so last year in our core business and ended up growing at 33, I suspect something similar this year, right? If you do the math, we're going to be growing in the roughly 30% range+ in those businesses. They're super healthy. Liquid is growing a little faster than solid, that's been a long-term trend for us.

Speaker #5: And just as we told the world, we expect it to grow at 30% or so last year in our core business and ended up growing at 33, I suspect something similar this year.

Speaker #5: You can if you do the math, we're going to be growing in the roughly 30% range plus in those businesses. So they're super healthy.

Speaker #5: Liquid is growing a little faster than solid. So that's been a long-term trend for us. We don't disclose breakdowns of each and so on and so forth.

Eric Lefkofsky: We don't disclose breakdowns of each and so on and so forth, but liquid is growing a little faster. Both are super healthy, and there's just no one driver of the growth. It's not as if, like, it's not as if repetitive testing or concurrent testing or this kind of testing or that kind of testing are having an outsized impact. We're just seeing really good solid growth. We're seeing really good liquid growth, slightly better, but that's been a long-term trend. And more and more people want the benefits of tumor normal profiling. More and more people want the benefits of DNA and RNA. More and more people want our connected platform that's intelligent. Our unit growth in oncology is just really strong and showing no signs of slowing down.

Speaker #5: But liquid is growing a little faster. Both are super healthy. And there's just no one driver of the growth. It's not as if—it's not as if repetitive testing or concurrent testing or this kind of testing or that kind of testing are having an outsized impact.

Speaker #5: We're just seeing really good, solid growth. We're seeing really good liquid growth—slightly better, but that's been a long-term trend. And more and more people want the benefits of tumor-normal profiling.

Speaker #5: More and more people want the benefits of DNA and RNA. More and more people want our connected platform that's intelligent. So our unit growth in oncology is just really strong and showing no signs of slowing down.

Speaker #4: Next question comes from the line of Andrew Brekman with William Blair. Please go ahead.

Tina: Next question comes from the line of Andrew Brackmann with William Blair. Please go ahead.

Operator: Next question comes from the line of Andrew Brackmann with William Blair. Please go ahead.

Speaker #10: Hi, guys. Good afternoon. Thanks for taking the questions. I'm Eric. It's sort of been just over a year since you closed on Ambri. And if we sort of go back to when that acquisition was announced, sort of a big part of that thesis was really around the data that you would be able to sort of generate across the entire sort of oncology testing spectrum.

Andrew Brackmann: Hey, guys. Good afternoon. Thanks for taking the questions. Eric, it's sort of been a just over a year since you closed on Ambry. If we sort of go back to when that acquisition was announced, sort of a big part of that thesis was really around the data that you would be able to sort of generate across the entire sort of oncology testing spectrum. Can you maybe just sort of talk about the acquisition in that lens, now that it's sort of been a part of the company for some time? Just sort of what you're seeing in that regard and how that's led to growth in the data business as well. Thanks.

Speaker #10: So, can you maybe just sort of talk about the acquisition in that lens now that it's sort of been a part of the company for some time?

Speaker #10: Just sort of what you're seeing in that regard and how that's led to growth in the data business as well. Thanks.

Speaker #5: Yeah, so we called out multiple reasons to acquire Ambri. The first, by far, was to broaden the comprehensive nature of our testing compendium. So if someone said to me, "Why did you buy Ambri?" I wouldn't say data.

Eric Lefkofsky: I think we called out, you know, multiple reasons to acquire Ambry. The first, by far, was to broaden the comprehensive nature of our testing compendium. If someone said to me, Why'd you buy Ambry? I wouldn't say data. I would say, the number one reason we bought Ambry was they had a very strong hereditary profile. More and more of our clients want a comprehensive solution. I think we've said this historically. You know, I very much believe that over the long term, when it comes to treating cancer patients, it's gonna be like e-commerce shoppers going online. I don't go to one e-commerce site for books and another for clothes and another for, you know, consumer electronics and so on and so forth.

Speaker #5: I would say the number one reason we bought Ambri was they had a very strong hereditary profile. More and more of our clients want a comprehensive solution.

Speaker #5: I think we've said this historically. I very much believe that, over the long term, when it comes to treating cancer patients, it's going to be like e-commerce shoppers going online.

Speaker #5: I don't go to one e-commerce site for books and another for clothes and another for consumer electronics and so on and so forth. I go to Amazon because they have kind of everything I need in one place.

Eric Lefkofsky: I go to Amazon because they have kind of everything I need in one place. I believe that's gonna be the case as it relates to sequencing. You know, more and more providers want somebody who can help them manage risk, help them treat patients once they've been diagnosed, and help them monitor those patients post-treatment. We wanna have a broad menu. That said, we're also seeing a trend of more and more of our provider partners, and certainly, obviously, to the benefit of patients, wanting to contribute de-identified data to platforms like ours, to be used to accelerate research and to accelerate drug discovery and development. This is a very big trend that I don't see stopping. We still have 600,000 people a year that die of cancer.

Speaker #5: And I believe that's going to be the case as it relates to sequencing. So more and more providers want somebody who can help them manage risk, help them treat patients once they've been diagnosed, and help them monitor those patients post-treatment.

Speaker #5: And so we want to have a broad menu. That said, we're also seeing a trend of more and more of our provider partners and certainly obviously to the benefit of patients wanting to contribute de-identified data to platforms like ours to be used to accelerate research and to accelerate drug discovery and development.

Speaker #5: This is a very big trend that I don't see stopping. We still have 600,000 people a year that die of cancer. We're not making nearly enough progress as it relates to eradicating that.

Eric Lefkofsky: We're not making nearly enough progress as it relates to eradicating that. I think you're seeing a movement among institutions that are saying, We need to help stop the waste, make sure these patients get better drugs and get them in market faster. We see that as a constant movement and a benefit of the kind of data we collect, and then on a de-identified basis, take to market.

Speaker #5: And so I think you're seeing a movement among institutions that are saying, "We need to help stop the waste. Make sure these patients get a better drugs and get them in market faster." And so we see that as a constant movement and a benefit of the kind of data we collect.

Speaker #5: And then, on a de-identified basis, take it to market.

Speaker #4: Our next question comes from the line of Dan Brennan with TD Cohen. Please go ahead.

Tina: Our next question comes on the line of Dan Brennan with TD Cowen. Please go ahead.

Operator: Our next question comes on the line of Dan Brennan with TD Cowen. Please go ahead.

Speaker #6: Great. Thank you, thanks, Steven.

Dan Brennan: Great. Thank you.

Speaker #5: Can't hear you.

Eric Lefkofsky: Can't hear you.

Speaker #6: Oh, sorry about that.

Dan Brennan: Oh, sorry about that. Sorry about that, Eric. Just maybe one on MRD and on insights. Just on MRD, any update on the first-gen CRC assay? I know it's sitting at MolDX, just any color there. On the next-gen tumor-naive assay, have you guys discussed kind of what type of performance advantage you would expect to get out of that? Obviously, you're filing for two, you know, tumor types this year, and then you have another two that you mentioned in the letter. Just wondering what kind of performance enhancements you think that could offer versus the existing tumor-naive landscape.

Speaker #5: Sorry about that, Eric. Just maybe one on MRD and on insights. Just on MRD, any update on the first-gen CRC assay? I know it's sitting at MOLDEX.

Speaker #5: Just any color there. And on the next-gen tumor naive assay? Have you guys discussed kind of what type of performance advantage you would expect to get out of that?

Speaker #5: Obviously, you're filing for two tumor types this year, and then you have another two that you mentioned in the letter. Just wondering what kind of performance enhancements you think that could offer versus the existing tumor-naive landscape.

Speaker #5: Yeah, so we're in a back and forth with MOLDEX now. We didn't call out when that gets resolved. I mean, because I don't control MOLDEX.

Eric Lefkofsky: Yeah. We're in a back and forth with MolDX now. You know, we didn't call out when that gets resolved. I mean, 'cause I don't control MolDX. I mean, it's possible that we have reimbursement in a month, and it's possible that it takes longer. I don't, I don't have any idea. We also didn't call it out because it's just not that relevant to our current MRD offering, which is, I don't know, like 95% tumor-informed. Because we're largely in market with a tumor-informed product in partnership with Personalis, it just represents the vast majority of our current market penetration. This particular product, which I do expect will be reimbursed by MolDX, is just not gonna be a needle mover because what's the goalposts keep moving.

Speaker #5: I mean, so it's possible that we have reimbursement in a month, and it's possible that it takes longer. I don't have any idea. We also didn't call it out because it's just not that relevant to our current MRD offering, which is, I don't know, like 95% tumor-informed.

Speaker #5: So because we're largely in market with a tumor-informed product in partnership with Personalis, it just represents the vast majority of our current market penetration.

Speaker #5: And this particular product, which I do expect will be reimbursed by MOLDEX, is just not going to be a needle mover because what the goalposts keep moving.

Speaker #5: And so what's happening is tumor naive products have to keep getting better and better to really compete. In CRC, I think it's going to be quite some time before you have a significant amount of the volume moving away from tumor-informed to tumor naive.

Eric Lefkofsky: What's happening is tumor-naive products have to keep getting better and better to really compete. In CRC, I think it's gonna be quite some time before you have a significant amount of the volume moving away from tumor-informed to tumor-naive. I think the naive market is either episodic or it's for those patients where, for whatever reason, they can't get tissue. Tissue is pretty pervasive in colorectal cancer, I think tumor-informed wins the day in that subtype for a while. There are other subtypes, like, for example, lung, where tissue is more sparse, where I think tumor-naive products can do quite well. We realized that we just weren't getting the performance off the first version of our assay, so instead of like, you know, we're running a ton of studies to collect samples.

Speaker #5: So, I think the naïve market is either episodic, or it's for those patients where, for whatever reason, they can't get tissue. But tissue is pretty pervasive in colorectal cancer.

Speaker #5: And so I think tumor-informed wins the day in that subtype for a while. There are other subtypes, like for example, lung, where tissue is more sparse, where I think tumor naive products can do quite well.

Speaker #5: We realize that we just weren't getting the performance off the first version of our assay. So instead of like we're running a ton of studies to collect samples.

Speaker #5: I mean, a ton. And so we decided to kind of pivot and begin working on the second generation of the assay instead of like burning those very precious study samples on an old version.

Eric Lefkofsky: I mean, a ton. We decided to kind of pivot and begin working on the second generation of the assay. Instead of, like, burning those very, precious study samples on an old version, we wanted to move to the new version, so we kind of pivoted, and we were fortunate. Everything we do takes into consideration this notion of, like, a comprehensive portfolio. We were fortunate that we had a tumor-naive product that was just, you know, kind of doing super well on the market, more than giving us more volume than we candidly want or need. We didn't have to kind of overly push on the accelerator for tumor-naive. The second version is coming along well, and I suspect at some point we'll have a really nice assay in market.

Speaker #5: We wanted to move to the new version so we kind of pivoted. And we were fortunate. Everything we do takes into consideration this notion of like a comprehensive portfolio.

Speaker #5: So we were fortunate that we had a tumor naive product that was just kind of doing super well in the market more than giving us more volume than we candidly want, or need.

Speaker #5: And so we didn't have to kind of overly push on the accelerator for tumor naive. But the second version is coming along well. And I suspect at some point we'll have a really nice assay in market.

Speaker #4: Our next question comes from the line of Mark Chappelle with Loop Capital Markets. Please go ahead.

Tina: Next question comes from the line of Mark Chapman with Loop Capital Markets. Please go ahead.

Operator: Next question comes from the line of Mark Chapman with Loop Capital Markets. Please go ahead.

Speaker #7: Eric, the start of the year is typically when companies adjust their sales organizations and their go to market strategies. First, if you could just give us an idea of whether you've implemented any meaningful changes to the sales org this year.

Liz Croccolo: Eric, you know, the start of the year is typically when companies adjust their sales organizations and their go-to-market strategies. First, if you could just give us an idea of whether you've implemented any meaningful changes to the sales org this year. As a follow-up, maybe you could just sketch out what you believe are the firm's kind of key investment priorities for the coming year.

Mark Chapman: Eric, you know, the start of the year is typically when companies adjust their sales organizations and their go-to-market strategies. First, if you could just give us an idea of whether you've implemented any meaningful changes to the sales org this year. As a follow-up, maybe you could just sketch out what you believe are the firm's kind of key investment priorities for the coming year.

Speaker #7: And then as a follow-up, maybe you could just sketch out what you believe are the firm's kind of key investment priorities for the coming year.

Speaker #5: In terms of the sales force, we've made no big moves to the reorg of the sales force. We did that obviously early 2025, and we announced the impact of that.

Eric Lefkofsky: In terms of the sales force, we've made no big moves to the, to reorg the sales force. We did that obviously early 2025, and we announced the impact of that. The good news is we're long lapping that. In terms of our priorities, they remain the same, to bring the benefits of technology and AI broadly to diagnostics and make sure that every decision, whether that's a decision in clinic or a decision for research, is data-driven. I would expect us, given that we're growing so rapidly and our business accelerating, I would expect us to stay the course.

Speaker #5: And so the good news is we're long lapping that. And in terms of our priorities, they remain the same, to bring the benefits of technology and AI broadly to diagnostics and make sure that every decision, whether it's a decision in clinic or a decision for research, is data-driven.

Speaker #5: And I would expect us, given that we're growing so rapidly in our business accelerating, I would expect us to stay the course.

Speaker #4: Our final question comes from the line of Bradley Bowers with Mizuho. Please go ahead.

Tina: Our final question comes from the line of Bradley Bowers with Mizuho. Please go ahead.

Operator: Our final question comes from the line of Bradley Bowers with Mizuho. Please go ahead.

Speaker #8: Hey, thanks for taking the question. Just wanted to get into some of the ASP outlook and maybe the gross margin implication. Obviously, a lot of upside here with the 2,200 to test outlook.

Bradley Bowers: Hey there. Thanks for taking the question. Just wanted to get into some of the ASP outlook and maybe the gross margin implication. You know, obviously, a lot of upside here with the $2,200 a test outlook. Just wanted to kind of hear about what the expectations should be for gross margin. You know, it assumes a big lift. I mean, if you assume that the costs hold and do some math, it kind of gets towards, you know, gross margin in the genomic side of, you know, 70%+. You know, what could you say about that progression? Is that one-to-one with ASP, or are there some offsets we should be considering? Thank you.

Speaker #8: Just wanted to kind of hear about what the expectation should be for gross margin. It assumes a big lift. I mean, if you assume that the costs hold and do some math, it kind of gets towards gross margin on the genomic side of 70% plus. What could you say about that progression?

Speaker #8: And is that one-to-one with ASP? Or are there some offsets we should be considering? Thank you.

Speaker #5: Yeah, I think obviously anytime ASP increases, that would lead to an increase in gross margin. I think we've long kind of taken the approach that as ASPs kind of increase or as costs of sequencing come down, to reassess kind of how much you kind of increase the size of panels to generate more data.

Jim Rogers: Yeah, I think when we, you know, obviously, anytime ASP increases, that would lead to an increase in gross margin. I think we've long kind of taken the approach that as ASPs kind of increase or as costs of sequencing come down, to reassess kind of how much you kind of increase the size of panels to generate more data. Obviously, that's great for patients and great for doctors and all that. That's something that we do on kind of an annual basis. You know, we're not, you know, given the fact that we have kind of these two businesses, diagnostics and data, we're less reliant on maximizing gross profit within the diagnostics kind of product line as some of our peers may be.

Speaker #5: Obviously, that's great for patients and great for doctors and all that. And so that's something that we do on kind of an annual basis.

Speaker #5: We're not given the fact that we have kind of these two businesses diagnostics and data, we're less reliant on maximizing gross profit within the diagnostics kind of product line as some of our peers maybe.

Speaker #5: That said, as ASPs increase, we would anticipate seeing some increases in gross profit. But always balancing to make sure that we're bringing to the market the broadest panels possible because it obviously has a bunch of downstream implications.

Jim Rogers: That said, as ASPs increase, we would anticipate seeing some increases in gross profit, but always balancing to make sure that we're, you know, bringing to the market the broadest panels possible because it obviously has a bunch of downstream implications.

Speaker #4: And no further questions. In queue, I will now hand the call back over to Liz Krutoholow for closing remarks.

Tina: With no further questions in queue, I will now hand the call back over to Liz Croccolo for closing remarks.

Operator: With no further questions in queue, I will now hand the call back over to Liz Croccolo for closing remarks.

Speaker #9: Thank you all for joining us today. We look forward to updating you again next quarter. Have a great day.

Liz Croccolo: Thank you all for joining us today. We look forward to updating you again next Q. Have a great day.

Tina: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

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