Tempus AI Approaching Profitability Despite GAAP Losses

Tempus AI TEM is showing early signs of a profitability inflection, marked by its first positive Adjusted EBITDA in the third quarter of 2025 and a raised full-year revenue guidance. Management also reaffirmed its expectation for slightly positive adjusted EBITDA for full-year 2025, highlighting improving cost control and operating leverage as revenues scale. While the Paige acquisition continues to weigh on near-term profitability and is yet to contribute significantly to earnings, the core business momentum remains constructive.

Gross profit nearly doubled year over year in the third quarter, reflecting scale in both Genomics and Data and services businesses. Notably, management continues to emphasize disciplined spending, even as it invests in regulatory filings and AI compute, which are necessary to support long-term growth. Looking ahead, fourth-quarter 2025 Adjusted EBITDA is guided to remain positive, supported by multi-quarter growth trends across both business segments. As ADLT migrations progress and Data bookings convert into recognized revenues, pricing improvements and mix shift could further support margin expansion.

However, the quality of profitability remains a key consideration. GAAP losses persisted despite the positive Adjusted EBITDA, reflecting substantial stock-based compensation, higher amortization of acquired intangibles from the Ambry transaction and a one-time loss related to debt extinguishment. Non-GAAP profitability thus remains dependent on adjustments that exclude significant recurring non-cash items. Moreover, the absence of GAAP net loss guidance limits visibility into the timeline for achieving sustainable GAAP profitability, keeping the inflection thesis largely non-GAAP-driven in the near term.

Peer Update

Hims & Hers Health, Inc. HIMS posted robust revenue growth in third-quarter 2025, approaching $600 million, while also achieving positive net income. HIMS’ profitability remains in transition, shaped by deliberate spending on new specialties, international expansion and vertical integration that temporarily pressure margins but are intended to support long-term recurring growth. Hims & Hers’ official entry into markets such as Canada and the U.K., along with continued expansion across Europe, reflects confidence in the portability of its business model.

GoodRx Holdings, Inc. GDRX is maintaining stable overall revenues while continuing to shift growth toward higher-margin pharmaceutical manufacturer solutions, which saw strong year-over-year expansion. GoodRx has also rolled out new condition-specific subscriptions, including weight-loss and hair-loss offerings, reinforcing its direct-to-consumer strategy. While prescription transaction volumes remain under pressure, GoodRx is maintaining disciplined cost controls and focusing on margin durability as its growth model evolves.

TEM’s Stock Price Performance

Over the past year, Tempus’ shares have rallied 81.4% against the industry’s 2.4% decline. The S&P 500 composite has improved 16.3% in the same time.

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Expensive Valuation

TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 7.42X compared with the industry average of 5.77X.

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TEM Stock Estimate Trend

In the past 30 days, Tempus AI's loss per share estimate for 2025 has remained unchanged.

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TEM 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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