Tempus AI Revenue Up 23%; Gains Cut Net Loss: Rapid Earnings Reaction
Key Points
Data and Applications revenue grew 33% and earns gross margins above 71%, so its faster growth lifts company-wide margins.
The adjusted EBITDA outlook held at about $65 million, implying a jump to roughly $34 million in Q4 that investors should verify.
Tempus AI (NASDAQ:TEM) grew third-quarter revenue 23% to $411.5 million and raised its 2026 revenue outlook. Shares rose about 3.9% in pre-market trading. But the net loss narrowed to $14.9 million from $80.0 million, largely because of $42.8 million in unrealized gains on marketable securities. The operating loss barely moved, so the core business still spends more than it earns.
Key Numbers
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- Revenue: $411.5 million, up 23%.
- Data and Applications revenue: $108.1 million, up 33%.
- Loss from operations: $56.9 million, versus $61.0 million a year earlier.
- Adjusted EBITDA: $25.6 million, versus $1.5 million a year earlier.
What It Means
Data and Applications is where the margin gains come from. It earns a gross margin above 71%, well ahead of testing, so faster growth there lifts companywide margin.
Most of the net loss improvement is non-operating. Gains on stock Tempus holds run through the income statement and can reverse in any quarter, so treat that part as paper, not progress.
Adjusted EBITDA looks strong because it adds back stock-based pay, which was about $48 million. That cost is real, since it dilutes owners.
What to Watch Next
Revenue guidance rose, but the adjusted EBITDA outlook held at about $65 million. That implies about $34 million in the fourth quarter, up from $25.6 million, so check whether it arrives. Also watch whether Hereditary testing revenue, up just 3%, picks up.
David Kretzmann has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tempus AI. The Motley Fool has a disclosure policy.