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Tempus AI Nears Profitability as Operating Leverage Emerges
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Key Takeaways
TEM's profitability improved in 2025 with gross profit up 94.7% and positive adjusted EBITDA.
TEM's Diagnostics strength and scale drove margins, with 2026 EBITDA projected near $65M.
TEM's GAAP losses persist due to stock-based pay and amortization, limiting earnings clarity.
Tempus AI’s (TEM - Free Report) profitability trajectory strengthened through 2025, supported by scale and a favorable product mix that drove gross profit expansion and positive adjusted EBITDA. Fourth-quarter 2025 gross profit surged 94.7% year over year, led by strong momentum in the Diagnostics segment.
Adjusted EBITDA reached $12.9 million, and the company expects approximately $65 million in adjusted EBITDA for 2026, implying a meaningful step-up as the cost structure begins to benefit from scale and improved operating discipline. This trend is notable, as it highlights how the model performs as diagnostics volumes and data contracts expand. If reimbursement gains and data conversion continue in tandem, operating leverage is more likely to become a sustained structural advantage rather than a quarter-dependent outcome.
However, Tempus continues to report GAAP net losses of $54.2 million, reflecting significant stock-based compensation, other non-cash expenses, and amortization tied to acquisitions. In 2025, stock-based compensation and related payroll taxes were a major contributor to the net loss, and fourth-quarter results suggest that this expense burden may remain elevated even as the operating model scales.
The company’s guidance emphasizes on revenues and adjusted EBITDA rather than GAAP earnings, limiting visibility into the timeline for achieving GAAP profitability. As long as sizable GAAP losses persist, the company’s valuation is likely to depend more on confidence in long-term operating leverage than on near-term earnings progression.
Peer Update
Hims & Hers Health, Inc. (HIMS - Free Report) reported strong fourth-quarter 2025 results, with revenues reaching nearly $617.8 million and the company achieving positive net income. Its profitability remains in transition, influenced by strategic investments in new specialties, international expansion, and vertical integration — initiatives that may pressure margins in the near term but are designed to support long-term recurring growth. The company’s entry into markets such as Canada and the U.K., along with ongoing expansion across Europe, underscores confidence in the scalability of its business model.
GoodRx Holdings, Inc. (GDRX - Free Report) is maintaining stable overall revenues while shifting growth toward higher-margin pharmaceutical manufacturer solutions, which have delivered strong year-over-year expansion. The company has also introduced new condition-specific subscriptions, including weight-loss and hair-loss offerings, reinforcing its direct-to-consumer strategy. Although prescription transaction volumes remain under pressure, GoodRx continues to exercise disciplined cost control and focus on sustaining margins as its growth model evolves.
TEM’s Stock Price Performance
Over the past year, Tempus’ shares have plunged 3.9%, outperforming the industry’s 21.5% decline. The S&P 500 composite has improved 34.2% in the same time frame.
Image Source: Zacks Investment Research
TEM’s Valuation
TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 5.39X compared with the industry median of 5.38X.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
In the past 30 days, Tempus AI's loss per share estimate for 2026 has remained unchanged.
View the Zacks #1 Rank List
Image: Bigstock
Tempus AI Nears Profitability as Operating Leverage Emerges
Key Takeaways
Tempus AI’s (TEM - Free Report) profitability trajectory strengthened through 2025, supported by scale and a favorable product mix that drove gross profit expansion and positive adjusted EBITDA. Fourth-quarter 2025 gross profit surged 94.7% year over year, led by strong momentum in the Diagnostics segment.
Adjusted EBITDA reached $12.9 million, and the company expects approximately $65 million in adjusted EBITDA for 2026, implying a meaningful step-up as the cost structure begins to benefit from scale and improved operating discipline. This trend is notable, as it highlights how the model performs as diagnostics volumes and data contracts expand. If reimbursement gains and data conversion continue in tandem, operating leverage is more likely to become a sustained structural advantage rather than a quarter-dependent outcome.
However, Tempus continues to report GAAP net losses of $54.2 million, reflecting significant stock-based compensation, other non-cash expenses, and amortization tied to acquisitions. In 2025, stock-based compensation and related payroll taxes were a major contributor to the net loss, and fourth-quarter results suggest that this expense burden may remain elevated even as the operating model scales.
The company’s guidance emphasizes on revenues and adjusted EBITDA rather than GAAP earnings, limiting visibility into the timeline for achieving GAAP profitability. As long as sizable GAAP losses persist, the company’s valuation is likely to depend more on confidence in long-term operating leverage than on near-term earnings progression.
Peer Update
Hims & Hers Health, Inc. (HIMS - Free Report) reported strong fourth-quarter 2025 results, with revenues reaching nearly $617.8 million and the company achieving positive net income. Its profitability remains in transition, influenced by strategic investments in new specialties, international expansion, and vertical integration — initiatives that may pressure margins in the near term but are designed to support long-term recurring growth. The company’s entry into markets such as Canada and the U.K., along with ongoing expansion across Europe, underscores confidence in the scalability of its business model.
GoodRx Holdings, Inc. (GDRX - Free Report) is maintaining stable overall revenues while shifting growth toward higher-margin pharmaceutical manufacturer solutions, which have delivered strong year-over-year expansion. The company has also introduced new condition-specific subscriptions, including weight-loss and hair-loss offerings, reinforcing its direct-to-consumer strategy. Although prescription transaction volumes remain under pressure, GoodRx continues to exercise disciplined cost control and focus on sustaining margins as its growth model evolves.
TEM’s Stock Price Performance
Over the past year, Tempus’ shares have plunged 3.9%, outperforming the industry’s 21.5% decline. The S&P 500 composite has improved 34.2% in the same time frame.
Image Source: Zacks Investment Research
TEM’s Valuation
TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 5.39X compared with the industry median of 5.38X.
Image Source: Zacks Investment Research
TEM Stock Estimate Trend
In the past 30 days, Tempus AI's loss per share estimate for 2026 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.