Hereditary and Oncology Diagnostics Outlook
Q: Kyle Mikson with Canaccord Genuity asked about hereditary business headwinds and the outlook for diagnostics in 2027.
A: Eric Lefkofsky noted hereditary unit growth returned to low double digits in September and October. James Rogers stated oncology ASPs will see an $80 million uplift in 2027 due to the FDA approval of the XT test.
Long-term Growth and Financial Targets
Q: Sarah James with Cantor Fitzgerald asked about 2027 headwinds and the feasibility of maintaining a 25% long-term growth rate.
A: Eric Lefkofsky stated that a 25% long-term growth rate is achievable and healthy, noting strong unit growth in oncology and 33% growth in the data business.
MRD Strategy and Personalis Acquisition
Q: Mark Massaro with BTIG asked about the timeline for allowing the full sales force to sell the MRD test.
A: Eric Lefkofsky explained that the rollout depends on reimbursement and reaching breakeven on a per-test basis, which is expected around mid-2027.
Q: Bradley Bowers with Mizuho asked about the competitive landscape for the MRD offering.
A: Eric Lefkofsky stated the assay is best-in-class and the company expects to be a market leader by leveraging their existing technology stack and sales infrastructure.
Data Business and AI Modeling
Q: Ryan MacDonald with Needham asked about the data business pipeline and visibility into 2027.
A: James Rogers noted that the business has shifted to long-term contracts, providing better visibility, while Eric Lefkofsky highlighted the move toward long-term subscriptions for the Lens platform.
Q: Evie Koslowski with Goldman Sachs asked how AI modeling impacts customer stickiness.
A: Eric Lefkofsky explained that clients are increasingly performing analytics and building models within the Tempus environment using GPU clusters, which creates high stickiness.
Q: Dan Arias with Stifel asked about the outlook for the clinical trial matching business.
A: Eric Lefkofsky stated the business has pivoted to an enterprise-focused model that generates enrollments for large pharma partners and is considered a premium product.
Liquid Biopsy and Market Trends
Q: Subu Nambi with Guggenheim asked about the drivers behind the strength in liquid biopsy volume.
A: Eric Lefkofsky attributed the growth to the benefits of concurrent solid and liquid testing and the importance of serial testing for later-stage patients.
EBITDA and Capital Allocation
Q: Dan Brennan with TD Cowen asked about the strategy for reinvesting gross profit versus letting it drop to the bottom line.
A: James Rogers stated the company reinvests roughly two-thirds of incremental gross profit back into the business and will initially absorb losses from the Personalis acquisition.
Retail Investor Questions
Q: A retail investor asked about growth opportunities outside of oncology.
A: Eric Lefkofsky highlighted the Alzheimer's collaboration with Pathos as a significant new area of growth outside of oncology.
Q: A retail investor asked about liquidity and the ability to fund growth if AI appetite weakens.
A: James Rogers stated the company is not reliant on one product and has strong visibility from both diagnostics and data businesses.
Q: A retail investor asked how the company ensures a growing inflow of patient data.
A: Eric Lefkofsky explained that data flows from a diversified network of more than 8,000 providers, ensuring a constant stream of information.
