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Tempus Stock Falls as Q4 Earnings & Revenues Miss Estimates
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Tempus AI, Inc. (TEM - Free Report) reported fourth-quarter 2024 adjusted loss per share of 18 cents, which missed the Zacks Consensus Estimate of a loss of 15 cents by 16.7%.
This segment reported sales of $120.4 million, up 30.6% year over year. This improvement was driven by the segment’s unit growth at 22.5% compared to the year-ago quarter. The segment’s adjusted gross profit totaled $57.4 million, up 42.8% year over year. The segment’s adjusted gross margin expanded 420 basis points (bps) to 49.6% compared with the prior-year quarter.
Data and Services
Sales in the segment amounted to $80.2 million, up 44.6% year over year. Adjusted gross profit totaled $64.4 million, up 62.2% year over year. Adjusted gross margin expanded 880 bps to 80.3%.
Margins
Adjusted gross profit totaled $124.2 million, up 52.3% from the year-ago quarter’s level. The adjusted gross margin expanded 670 bps to 61.9%.
Total adjusted operating expenses were $142.5 million, up 6.5% from the year-ago quarter’s level.
Total loss from operations amounted to $50.7 million, marking an improvement of 3.1% from the year-ago period’s loss.
Financial Update
Tempus exited the fourth quarter with cash and cash equivalents and marketable securities of $341 million compared with $388 million in the third quarter.
Cumulative net cash used in operating activities totaled $189 million compared with $214.3 million a year ago.
2025 Guidance
Tempus expects full-year 2025 revenues of approximately $1.24 billion, suggesting an approximate year-over-year growth of 79%. This compares to the previous guidance of $1.23 billion. The Zacks Consensus Estimate for revenues is pegged at $900.3 million.
Wrapping Up
Tempus exited the fourth quarter of 2024 with disappointing results, as both earnings and revenues missed their respective Zacks Consensus Estimate. However, the company witnessed strong top-line growth in both its segments. TEM’s Data and Services segment also witnessed significant expansion in adjusted gross margin and impressive top-line growth.
Meanwhile, the company continues to incur losses at the operating level. Shares of TEM lost 13.7% during after-market trading following its fourth-quarter results. However, the company’s shares have gained 47.8% in the past six months compared with the industry’s growth of 16.4%. The broader S&P 500 Index has increased 7.1% in the same time frame.
Image Source: Zacks Investment Research
TEM reported significant developments on its fourth-quarter earnings call, highlighting key advancements across multiple areas. The company successfully completed its acquisition of Ambry Genetics earlier this month, adding a West Coast lab to its existing facilities in Chicago, Raleigh and Atlanta. Over the next one to two years, Tempus plans to integrate somatic workflows at Ambry’s facility and cross-utilize inherited risk assays to enhance efficiency and redundancy.
Financially, the company ended the year with a total remaining contract value of $940 million and achieved 140% net revenue retention, reflecting strong customer commitments, particularly in the Data and Services segment. Tempus also officially launched its FDA-approved, NGS-based in vitro diagnostic test, xT CDx, on a national scale. By the end of the first quarter of 2025, approximately 20% of xT volume is expected to transition to the Advanced Diagnostic Laboratory Test (“ADLT”) version, with full migration planned over the next year.
Another milestone was reached when the Centers for Medicare and Medicaid Services (“CMS”) approved reimbursement for Tempus’ ECG-AF algorithm, which assesses cardiac dysfunction. This decision marks a significant step in gaining broader payer acceptance for AI-driven diagnostics.
Additionally, Tempus secured agreements with multiple Blue Cross Blue Shield plans, improving reimbursement rates and providing long-term benefits, though it remains largely out-of-network for commercial payers.
Further expanding its reach, Tempus now has connections to around 3,000 providers in the United States, strengthening its position in the genomic and AI-driven healthcare space. With continued growth in its core businesses, strategic acquisitions and expanding provider partnerships, Tempus AI remains focused on advancing precision medicine and AI-driven diagnostics.
TEM’s Zacks Rank and Key Picks
Tempus currently has a Zacks Rank #3 (Hold), whileGlaukos carries a Zacks Rank #2 (Buy).
Some better-ranked stocks from the industry have been discussed below.
AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 4% in the past six months against the industry’s 2.1% growth.
Alphatec (ATEC - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 40% for 2025. Its earnings missed estimates in each of the trailing four quarters, delivering a negative average surprise of 12.60%. The company is scheduled to release fourth-quarter results on Feb. 26.
ATEC’s shares have gained 87.7% against the industry’s 0.1% decline in the past six months.
Masimo (MASI - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 9.5% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47% against the industry’s 0.1% decline in the past six months. The company is scheduled to release fourth-quarter results today.
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Tempus Stock Falls as Q4 Earnings & Revenues Miss Estimates
Tempus AI, Inc. (TEM - Free Report) reported fourth-quarter 2024 adjusted loss per share of 18 cents, which missed the Zacks Consensus Estimate of a loss of 15 cents by 16.7%.
GAAP loss per share was 8 cents.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Revenue Details
Revenues totaled $200.7 million, which missed the Zacks Consensus Estimate by 2.7%. The top line, however, improved 35.8% on a year-over-year basis.
Tempus AI, Inc. Price, Consensus and EPS Surprise
Tempus AI, Inc. price-consensus-eps-surprise-chart | Tempus AI, Inc. Quote
Segmental Analysis
Geonomics
This segment reported sales of $120.4 million, up 30.6% year over year. This improvement was driven by the segment’s unit growth at 22.5% compared to the year-ago quarter. The segment’s adjusted gross profit totaled $57.4 million, up 42.8% year over year. The segment’s adjusted gross margin expanded 420 basis points (bps) to 49.6% compared with the prior-year quarter.
Data and Services
Sales in the segment amounted to $80.2 million, up 44.6% year over year. Adjusted gross profit totaled $64.4 million, up 62.2% year over year. Adjusted gross margin expanded 880 bps to 80.3%.
Margins
Adjusted gross profit totaled $124.2 million, up 52.3% from the year-ago quarter’s level. The adjusted gross margin expanded 670 bps to 61.9%.
Total adjusted operating expenses were $142.5 million, up 6.5% from the year-ago quarter’s level.
Total loss from operations amounted to $50.7 million, marking an improvement of 3.1% from the year-ago period’s loss.
Financial Update
Tempus exited the fourth quarter with cash and cash equivalents and marketable securities of $341 million compared with $388 million in the third quarter.
Cumulative net cash used in operating activities totaled $189 million compared with $214.3 million a year ago.
2025 Guidance
Tempus expects full-year 2025 revenues of approximately $1.24 billion, suggesting an approximate year-over-year growth of 79%. This compares to the previous guidance of $1.23 billion. The Zacks Consensus Estimate for revenues is pegged at $900.3 million.
Wrapping Up
Tempus exited the fourth quarter of 2024 with disappointing results, as both earnings and revenues missed their respective Zacks Consensus Estimate. However, the company witnessed strong top-line growth in both its segments. TEM’s Data and Services segment also witnessed significant expansion in adjusted gross margin and impressive top-line growth.
Meanwhile, the company continues to incur losses at the operating level. Shares of TEM lost 13.7% during after-market trading following its fourth-quarter results. However, the company’s shares have gained 47.8% in the past six months compared with the industry’s growth of 16.4%. The broader S&P 500 Index has increased 7.1% in the same time frame.
Image Source: Zacks Investment Research
TEM reported significant developments on its fourth-quarter earnings call, highlighting key advancements across multiple areas. The company successfully completed its acquisition of Ambry Genetics earlier this month, adding a West Coast lab to its existing facilities in Chicago, Raleigh and Atlanta. Over the next one to two years, Tempus plans to integrate somatic workflows at Ambry’s facility and cross-utilize inherited risk assays to enhance efficiency and redundancy.
Financially, the company ended the year with a total remaining contract value of $940 million and achieved 140% net revenue retention, reflecting strong customer commitments, particularly in the Data and Services segment. Tempus also officially launched its FDA-approved, NGS-based in vitro diagnostic test, xT CDx, on a national scale. By the end of the first quarter of 2025, approximately 20% of xT volume is expected to transition to the Advanced Diagnostic Laboratory Test (“ADLT”) version, with full migration planned over the next year.
Another milestone was reached when the Centers for Medicare and Medicaid Services (“CMS”) approved reimbursement for Tempus’ ECG-AF algorithm, which assesses cardiac dysfunction. This decision marks a significant step in gaining broader payer acceptance for AI-driven diagnostics.
Additionally, Tempus secured agreements with multiple Blue Cross Blue Shield plans, improving reimbursement rates and providing long-term benefits, though it remains largely out-of-network for commercial payers.
Further expanding its reach, Tempus now has connections to around 3,000 providers in the United States, strengthening its position in the genomic and AI-driven healthcare space. With continued growth in its core businesses, strategic acquisitions and expanding provider partnerships, Tempus AI remains focused on advancing precision medicine and AI-driven diagnostics.
TEM’s Zacks Rank and Key Picks
Tempus currently has a Zacks Rank #3 (Hold), whileGlaukos carries a Zacks Rank #2 (Buy).
Some better-ranked stocks from the industry have been discussed below.
Avenna Healthcare (AVAH - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated earnings growth rate of 666.7% for 2025. You can see the complete list of today’s Zacks #1 Rank stocks here.
AVAH delivered a trailing four-quarter average earnings surprise of 135.00%. The company is expected to release fourth-quarter results in March. Its shares have lost 4% in the past six months against the industry’s 2.1% growth.
Alphatec (ATEC - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 40% for 2025. Its earnings missed estimates in each of the trailing four quarters, delivering a negative average surprise of 12.60%. The company is scheduled to release fourth-quarter results on Feb. 26.
ATEC’s shares have gained 87.7% against the industry’s 0.1% decline in the past six months.
Masimo (MASI - Free Report) , carrying a Zacks Rank #2 at present, has an estimated growth rate of 9.5% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 47% against the industry’s 0.1% decline in the past six months. The company is scheduled to release fourth-quarter results today.