Cisco (CSCO: NASDAQ) and Coherent (COHR: NYSE) report this week. Cisco is selling its turnaround as proof it can still move with the market, not just against it. Coherent comes days after Apple (AAPL: NASDAQ)’s nod in Washington put it on the list of domestic suppliers worth watching. The numbers will show whether that attention translates to orders.

Past editions of this newsletter and a searchable research archive are at epistrophy.beehiiv.com. Check it out!

As always, we’re focused on three things:
1) Technology-driven change;
2) the latest in innovation and startup trends, and;
3) stock fraud.

Companies Discussed

In This Note:

• Companies Discussed

• Tempus In A Teapot

• Tweet O’ The Week

• Epistrophy In The News

• 📆 of Epistrophy Events

• Availability This Week

Tempus In A Teapot

TEM Q2 results boosted by overlooked related party transactions

The promise of Tempus AI (TEM: NYSE) has always been a dual-pronged growth story. Genomics — the lab business that sequences and analyzes patient samples for doctors and researchers — was supposed to be complemented by Data & Services, which sells access to Tempus’ growing library of clinical and molecular data to drugmakers and other third parties. The lab work would feed the data engine, and the data engine would deliver the high-margin growth.

But Tempus AI’s Data and Services business has stalled (full disclosure: I’m short shares of Tempus). Revenues have been stuck in a narrow range for more than two years and, if not for accounting stunts with related parties, would be in decline. In Q2 2025, the segment posted $72.8 million in revenue, up from $61.9 million in Q1. The uptick looks like momentum until you break it down — most of it came from two counterparties in a single, insider-controlled transaction.

One counterparty is Pathos AI, co-founded and chaired by Tempus CEO Eric Lefkofsky. Tempus holds an equity stake, Pathos’ board is stocked with Tempus insiders and the two share deep financial ties – they even share the same Chicago building. A year ago, related-party revenue in the segment was just $108,000. In Q2, $15.9 million came directly from Pathos. Without it, there would be no segment year-over-year growth.

The other counterparty is AstraZeneca (AZN:NYSE), a one-time partner that seems to be distancing itself from Tempus, letting a $100 million warrant expire in late 2024 and repeatedly extending an April 2021 Statement of Work. In April 2025, AstraZeneca agreed to pay $35 million, in the same quarter Pathos paid Tempus $50 million. These payments weren’t independent — AstraZeneca was also an investor in Pathos’ contemporaneous preferred stock financing, and Tempus immediately paid $35 million back to Pathos. 

Confused? Think of it this way: AstraZeneca gives Tempus a contractually-obligated $35 million. Tempus immediately passed $35 million to Pathos. Pathos immediately passed $50 million back to Tempus. Pathos and Tempus report both transactions revenues – AstraZeneca gets Pathos shares. (Oh yeah, some ill-defined AI data gets sprinkled around to all parties like fairy dust.)

Only $15.9 million of Pathos’ $50 million hit the Q2 income statement; the remaining $34.1 million sits on the balance sheet as deferred revenue — a cookie jar Tempus can dip into when needed if their accountants will allow it. The $35 million from AstraZeneca is less transparent. If one were to assume half was recognized in Q2, together, Pathos and AstraZeneca would have accounted for roughly 46% of the segment’s $72.8 million total, leaving just $39.4 million from all other customers.

That’s far below the $55 million the segment generated from independent customers two years ago. Strip out the related-party flows and the growth story disappears — replaced by transactions tied to insiders or counterparties unwinding prior obligations.

Wall Street cheered Tempus’ Q2 2025 results, with its $314.6 million revenues “beating the Street”  consensus of $296.9 million. The stock rallied. Only in the fine print do we see that 90% of the $17.7 million “beat” was from one related party, a transaction that looks like money going from the left pocket to the right pocket. 

And the CEO wearing those pants? He’s sold $46.4 million in TEM shares since that April deal was announced.

Tweet O’ The Week

Epistrophy In The News

On NewsNation with Laura Ingle, I discussed how Palantir (PLTR: NYSE)’s latest quarter reflects the real economics of selling AI at scale, and why the company’s contracts tell us more about the future of work than its headlines. We also looked at where the hype meets the limits of current AI deployment and how that gap could drive the next investment cycle. Watch the segment.

📆 of Epistrophy Events

Availability This Week

I’ll be in the Ferry Building all week. Clients and colleagues passing through are welcome to meet in person — the coffee at Shack15 is even better than the Wi-Fi.

Written reports are available to clients, with video summaries on YouTube and, of course our popular summaries of the summaries (yes, the second derivative) on Instagram and Tiktok.

I’m hoping these notes are helpful to you. I’d love to discuss them further and, as always, comments, questions and ideas are appreciated. If you know someone who may benefit from this note, have them reach out and I’ll put them on the list.