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TEM Q2 Loss Narrower Than Expected, Revenues Beat, Stock Up
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Key Takeaways
TEM's adjusted loss narrowed to 4 cents per share as revenues rose 21.6% to $382.5 million.
TEM's Oncology volume jumped 31%, while Data and Applications revenues advanced 28% to $93.2 million.
TEM raised 2026 sales guidance to $1.60-$1.61 billion and retained adjusted EBITDA view at about $65 million.
Tempus AI, Inc. (TEM - Free Report) reported a second-quarter 2026 adjusted loss of 4 cents per share, narrower than the year-ago loss of 22 cents. The figure beat the Zacks Consensus Estimate of a loss of 13 cents by 69.2%.
Revenues of $382.5 million increased 21.6% year over year and surpassed the consensus mark by 0.4%. Growth in Diagnostics and Data and Applications, along with 31% oncology volume growth, supported the top line.
Following the announcement, shares of Tempus AI rose 6.6% yesterday.
TEM's Diagnostics Growth Accelerates
Diagnostics revenues rose 20% year over year to $289.3 million. The segment benefited from stronger oncology testing demand, while hereditary revenue growth moderated to 5% against a difficult prior-year comparison.
Oncology volume climbed 31%, accelerating from 28% in the previous quarter. Hereditary revenues totaled $107.4 million.
Tempus' Data Business Gains Momentum
Data and Applications revenues increased 28% to $93.2 million. Insights, which includes data licensing and modeling, advanced 36% as pharmaceutical customers expanded their use of Tempus' multimodal data and AI capabilities.
Within the segment, Insights revenues amounted to $77.7 million, while Trials and Next generated $9 million and $6.3 million, respectively. The mix underscores the importance of data licensing to the segment's expansion.
TEM's Margin and Expense Performance
Gross profit advanced 26% to $246.5 million. The gross margin expanded to 64.4%, reflecting growth in the higher-margin Data and Applications business.
Total cost and operating expenses increased 21.8% to $458.4 million. Operating expenses moved higher, resulting in an operating loss of $75.9 million compared with $61.8 million a year ago.
Tempus Strengthens Cash and Financing
At the end of the second quarter of 2026, the company had cash and cash equivalents of $599.6 million compared with $521.2 million at the end of the first quarter.
Cumulative net cash used in investing activities at the end of the reported quarter was $21.2 million compared with $385.3 million a year ago.
TEM raised its 2026 revenue outlook to $1.60-$1.61 billion (up from $1.59-$1.60 billion), implying approximately 25% annual growth. The company continues to expect adjusted EBITDA of about $65 million for the year. The Zacks Consensus Estimate for revenues is pinned at $1.59 billion.
The outlook excludes any contribution from the pending Personalis acquisition, which is expected to be closed in the fourth quarter of 2026 or early 2027. Management also expects the recent refinancing to save more than $30 million in annual interest expense and support positive free cash flow by year-end.
Our Take on TEM Stock
Tempus AI ended second quarter of 2026 on a positive note, with revenues surpassing estimates and loss per share being narrower than expected. Also, loss reduced on a year-over-year basis. TEM achieved several milestones in the second quarter, including its strategic collaboration with the Keck School of Medicine of USC to integrate Tempus' AI platform. The company received FDA approval for tumor-only xT CDx assay, becoming the first laboratory to hold FDA companion diagnostic (CDx) approval for both tumor-only and tumor-normal comprehensive genomic profiling. Supported by the strong quarterly performance and multiple catalysts, management raised its 2026 revenue outlook.
Yet, the company’s quarterly operating loss looks discouraging.
TEM’s Zacks Rank and Key Picks
Tempus AI currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Phibro Animal Health (PAHC - Free Report) and QuidelOrtho CP (QDEL - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2026 adjusted EPS of $2.80, which exceeded the Zacks Consensus Estimate by 12.9%. Revenues of $2.89 billion topped the Zacks Consensus Estimate by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ISRG’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.5%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted a third-quarter fiscal 2026 adjusted EPS of 76 cents, which outpaced the Zacks Consensus Estimate by 5.9%. Revenues of $383.5 million outperformed the Zacks Consensus Estimate by 6.3%. PAHC’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.2%.
QuidelOrtho, currently carrying a Zacks Rank #2, reported a first-quarter 2026 adjusted loss of 4 cents per share, which missed the Zacks Consensus Estimate by 110.8%. Revenues of $619.8 million beat the Zacks Consensus Estimate by 0.3%. QDEL beat earnings estimates in three of the trailing four quarters and missed on one occasion.
View the Zacks #1 Rank List
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TEM Q2 Loss Narrower Than Expected, Revenues Beat, Stock Up
Key Takeaways
Tempus AI, Inc. (TEM - Free Report) reported a second-quarter 2026 adjusted loss of 4 cents per share, narrower than the year-ago loss of 22 cents. The figure beat the Zacks Consensus Estimate of a loss of 13 cents by 69.2%.
Revenues of $382.5 million increased 21.6% year over year and surpassed the consensus mark by 0.4%. Growth in Diagnostics and Data and Applications, along with 31% oncology volume growth, supported the top line.
Following the announcement, shares of Tempus AI rose 6.6% yesterday.
TEM's Diagnostics Growth Accelerates
Diagnostics revenues rose 20% year over year to $289.3 million. The segment benefited from stronger oncology testing demand, while hereditary revenue growth moderated to 5% against a difficult prior-year comparison.
Oncology volume climbed 31%, accelerating from 28% in the previous quarter. Hereditary revenues totaled $107.4 million.
Tempus' Data Business Gains Momentum
Data and Applications revenues increased 28% to $93.2 million. Insights, which includes data licensing and modeling, advanced 36% as pharmaceutical customers expanded their use of Tempus' multimodal data and AI capabilities.
Within the segment, Insights revenues amounted to $77.7 million, while Trials and Next generated $9 million and $6.3 million, respectively. The mix underscores the importance of data licensing to the segment's expansion.
TEM's Margin and Expense Performance
Gross profit advanced 26% to $246.5 million. The gross margin expanded to 64.4%, reflecting growth in the higher-margin Data and Applications business.
Total cost and operating expenses increased 21.8% to $458.4 million. Operating expenses moved higher, resulting in an operating loss of $75.9 million compared with $61.8 million a year ago.
Tempus Strengthens Cash and Financing
At the end of the second quarter of 2026, the company had cash and cash equivalents of $599.6 million compared with $521.2 million at the end of the first quarter.
Cumulative net cash used in investing activities at the end of the reported quarter was $21.2 million compared with $385.3 million a year ago.
Tempus AI, Inc. Price, Consensus and EPS Surprise
Tempus AI, Inc. price-consensus-eps-surprise-chart | Tempus AI, Inc. Quote
TEM Raises 2026 Revenue Guidance
TEM raised its 2026 revenue outlook to $1.60-$1.61 billion (up from $1.59-$1.60 billion), implying approximately 25% annual growth. The company continues to expect adjusted EBITDA of about $65 million for the year. The Zacks Consensus Estimate for revenues is pinned at $1.59 billion.
The outlook excludes any contribution from the pending Personalis acquisition, which is expected to be closed in the fourth quarter of 2026 or early 2027. Management also expects the recent refinancing to save more than $30 million in annual interest expense and support positive free cash flow by year-end.
Our Take on TEM Stock
Tempus AI ended second quarter of 2026 on a positive note, with revenues surpassing estimates and loss per share being narrower than expected. Also, loss reduced on a year-over-year basis. TEM achieved several milestones in the second quarter, including its strategic collaboration with the Keck School of Medicine of USC to integrate Tempus' AI platform. The company received FDA approval for tumor-only xT CDx assay, becoming the first laboratory to hold FDA companion diagnostic (CDx) approval for both tumor-only and tumor-normal comprehensive genomic profiling. Supported by the strong quarterly performance and multiple catalysts, management raised its 2026 revenue outlook.
Yet, the company’s quarterly operating loss looks discouraging.
TEM’s Zacks Rank and Key Picks
Tempus AI currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Phibro Animal Health (PAHC - Free Report) and QuidelOrtho CP (QDEL - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2026 adjusted EPS of $2.80, which exceeded the Zacks Consensus Estimate by 12.9%. Revenues of $2.89 billion topped the Zacks Consensus Estimate by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ISRG’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.5%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted a third-quarter fiscal 2026 adjusted EPS of 76 cents, which outpaced the Zacks Consensus Estimate by 5.9%. Revenues of $383.5 million outperformed the Zacks Consensus Estimate by 6.3%. PAHC’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.2%.
QuidelOrtho, currently carrying a Zacks Rank #2, reported a first-quarter 2026 adjusted loss of 4 cents per share, which missed the Zacks Consensus Estimate by 110.8%. Revenues of $619.8 million beat the Zacks Consensus Estimate by 0.3%. QDEL beat earnings estimates in three of the trailing four quarters and missed on one occasion.