TEM Once Again Raises Its 2025 Sales Guidance: What's Driving the Move?

Recently, Tempus AI TEM updated its sales guidance for 2025. It did so for the second time within six months, backed by a strong second-quarter performance. Full-year revenues are now expected to be approximately $1.26 billion (earlier $1.25 billion), indicating nearly 82% annual growth.

The company reported second-quarter revenues of $314.6 million, up 89.6% on a year-over-year basis. In the quarter, the Genomics business contributed $193.8 million to revenues, reflecting 115.3% growth year over year. This growth was driven by accelerating volume growth (up 26% year over year) in oncology.

The gross profit totaled $195 million, up a huge 158.3% from the year-ago quarter’s level. The adjusted gross margin expanded 1649 bps to 62% despite a 32.2% rise in the cost of revenues. Additionally, Tempus AI experienced another quarter of sequential improvement in adjusted EBITDA, which went from a negative $16 million last quarter to a negative $5.6 million this quarter. This improvement made the company expect a positive adjusted EBITDA of $5 million in 2025.

Tempus AI extended Tempus Next care pathway intelligence platform into breast cancer, furthering AI-driven decision support across oncology. Also, it introduced Tempus xM for treatment and response monitoring (TRM), a liquid biopsy assay designed to monitor immunotherapy response in patients with advanced solid tumors, providing clinicians with actionable, real-time insights. These recent developments also encouraged the company to raise its 2025 revenue guidance.

Robust Q2 Performance by TEM’s Competitors

Exact Sciences Corporation EXAS delivered a record 1.3 million test results to patients, accelerated revenue growth to 16% and generated an all-time high adjusted EBITDA of $138 million. Operationally, Screening revenues climbed 18% to $628 million on robust Cologuard adoption, and Precision Oncology revenues rose 9% on international uptake of Oncotype DX. Reflecting this momentum, management raised its 2025 revenue guidance to $3.13-$3.17 billion (from $3.07-$3.12 billion) and adjusted EBITDA guidance to $455-$475 million (from $425-$455 million).

Guardant Health GH delivered a strong second-quarter performance, with revenues up 31% year over year to $232.2 million, driven by robust performance across the oncology, screening and biopharma and data businesses. Oncology volumes increased 30% year over year to 64,000 tests, with the majority of growth driven by Guardant360 Liquid. The company saw gross profit of $153.8 million, up 44% year over year. Based on the performance, GH raised its full-year 2025 revenue guidance to $915-$925 million from $880-$890 million, implying growth of 24-25% year over year.

TEM Stock Outperforms Industry & Benchmark

In the past year, Tempus AI shares have surged 42.6%, outperforming the industry’s 23.4% growth and the S&P 500 composite’s 18.3% improvement.

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Expensive Valuation

TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 7.32X compared with the industry average of 5.57X.

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TEM Stock Estimate Trend

In the past 30 days, Tempus AI's projected loss per share has improved 2.9% for 2025 and 12% for 2026.

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TEM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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