TEM Q4 Earnings Miss, Revenues Beat, Stock Down in After-Market

Tempus AI, Inc. TEM reported a fourth-quarter 2025 adjusted loss of 4 cents per share compared with the year-ago quarter’s loss of 16 cents. The metric was wider than the Zacks Consensus Estimate of loss by 66.7%.

GAAP loss per share was 30 cents compared with the year-ago quarter’s GAAP loss of 8 cents.

Full-year 2025 adjusted loss was 61 cents per share compared with the year-ago quarter’s loss of $1.54 per share.

TEM’s Revenues

Fourth-quarter revenues totaled $367.2 million, which beat the Zacks Consensus Estimate by 0.1%. The top line surged 83% on a year-over-year basis.

Full-year 2025 revenues totaled $1.27 billion, up 83.3% on a year-over-year basis.

Following the announcement, shares of Tempus AI declined 3.7% in after-market trading yesterday, reflecting investor reaction to the company’s reported quarterly operating loss.

Details of TEM’s Q4 Revenues

In the fourth quarter, Diagnostics generated revenues of $266.9 million, representing a 121.6% year-over-year increase.

Within this, Oncology volume grew 29% year over year and Hereditary volume rose 23%.

The Data and Applications segment reported sales of $100.4 million, up 25.1% year over year. This was driven by Insights (data licensing), which grew 69.5% year over year.

TEM’s Margin Performance

The gross profit in the fourth quarter was $237.7 million, up 94.7% from the year-ago quarter’s level. The adjusted gross margin expanded 391 bps to 64.7% despite a 64.7% rise in the cost of revenues. 

Total adjusted operating expenses were $259 million, up 83.8% from the year-ago quarter’s level. The company incurred an operating loss of $21.3 million compared with the year-ago quarter’s loss of $18.8 million. 

TEM’s Liquidity Position

At the end of the fourth quarter of 2025, the company had cash and cash equivalents of $604.8 million compared with $340.9 million at the end of the fourth quarter of 2024.

Cumulative net cash used in investing activities at the end of the reported quarter was $398.3 million compared with $130.4 million a year ago.

Tempus AI’s Full-Year 2026 Outlook

The company provided its guidance for 2026. Full-year revenues are expected to be $1.59 billion, indicating nearly 25% annual growth. The Zacks Consensus Estimate for revenues is pinned at $1.56 billion.

Tempus AI, Inc. Price, Consensus and EPS Surprise

Tempus AI, Inc. price-consensus-eps-surprise-chart | Tempus AI, Inc. Quote

Adjusted EBITDA for the year is expected to be $65 million. 

Our Take on TEM Stock

Tempus AI ended the fourth quarter of 2025 on a mixed note, wherein earnings missed estimates but revenues topped. The company witnessed a significant reacceleration of its clinical volumes. It achieved several milestones in the fourth quarter, including its selection by Northwestern Medicine to expand genomic testing access for oncology patients across the health system.

TEM also launched Paige Predict, an AI-powered digital pathology suite. It entered into a multi-year strategic collaboration with NYU Langone Health, centered on a prospective observational study. 

The company’s quarterly operating loss looks discouraging. 

TEM’s Zacks Rank and Key Picks

Tempus AI currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Cardinal Health CAH and Align Technology ALGN.

Intuitive Surgical, currently sporting a Zacks Rank #1 (Strong Buy), reported a fourth-quarter 2025 adjusted EPS of $2.53, which surpassed the Zacks Consensus Estimate by 12.4%. Revenues of $2.87 billion beat the Zacks Consensus Estimate by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 12.7% rise. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 13.24%.

Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter fiscal 2026 adjusted EPS of $2.63, which outpaced the Zacks Consensus Estimate by 10%. Revenues of $65.6 billion topped the Zacks Consensus Estimate by 0.9%.

CAH has a long-term earnings growth rate of 15% compared with the industry’s 9.6% rise. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 9.3%.

Align Technology, carrying a Zacks Rank #2 at present, posted a fourth-quarter 2025 adjusted EPS of $3.29, which exceeded the Zacks Consensus Estimate by 10.1%. Revenues of $1.05 billion outperformed the Zacks Consensus Estimate by 5.3%.

ALGN has an estimated long-term earnings growth rate of 10.1% compared with the industry’s 9.5% rise. The company’s earnings outpaced estimates in three of the trailing four quarters and missed in one, the average surprise being 6.16%.

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

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