We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Tempus AI Approaching Profitability Despite GAAP Losses
Read MoreHide Full Article
Key Takeaways
TEM delivered its first positive Adjusted EBITDA in Q3 2025 and reaffirmed a positive FY outlook.
TEM's gross profit nearly doubled YoY in Q3 as Genomics and Data services scaled with disciplined spending.
TEM remained GAAP unprofitable due to stock comp, Ambry amortization and a one-time debt extinguishment.
Tempus AI (TEM - Free Report) 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 - Free Report) 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 - Free Report) 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.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
In the past 30 days, Tempus AI's loss per share estimate for 2025 has remained unchanged.
Image Source: Zacks Investment Research
TEM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Tempus AI Approaching Profitability Despite GAAP Losses
Key Takeaways
Tempus AI (TEM - Free Report) 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 - Free Report) 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 - Free Report) 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.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
In the past 30 days, Tempus AI's loss per share estimate for 2025 has remained unchanged.
Image Source: Zacks Investment Research
TEM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.