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Tempus AI (TEM)·Q4 2025 Earnings Summary

Tempus AI Crushes Q4 as Adj. EBITDA Turns Positive, Guides to 25% Growth

February 24, 2026 · by Fintool AI Agent

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Tempus AI delivered a strong Q4 2025, reporting revenue of $367.2M (+83% YoY) that slightly beat consensus while crushing EPS expectations with a Non-GAAP loss of just $0.04 versus the $0.14 loss expected . The precision medicine company achieved a key milestone with adjusted EBITDA reaching $12.9M—its strongest quarter ever—up from -$7.8M in Q4 2024 . Management guided to 25% revenue growth in 2026 with continued EBITDA expansion, signaling confidence in the durability of its data-driven healthcare platform.

Did Tempus AI Beat Earnings?

MetricQ4 2025 ActualConsensusSurprise
Revenue$367.2M$366.8M+0.1%
Non-GAAP EPS-$0.04-$0.14+71.4%
Adjusted EBITDA$12.9M$3.8M+242%

Tempus AI beat on all key metrics . The EPS beat was particularly notable—the 71% outperformance reflects the company's operating leverage as it scales. This marks Tempus's third consecutive EPS beat in the last four quarters .

Full Year 2025 Performance:

  • Revenue: $1.27B (+83% YoY)
  • Gross Profit: $797.9M (+109% YoY)
  • Adjusted EBITDA: -$7.4M (improved from -$104.7M in 2024)
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What Changed From Last Quarter?

The inflection to meaningful positive adjusted EBITDA marks a structural shift in the Tempus business model. Key changes from Q3 2025:

MetricQ3 2025Q4 2025Change
Revenue$314.6M$367.2M+16.7% QoQ
Gross Margin62.0%64.7%+270 bps
Adj. EBITDA$1.5M$12.9M+$11.4M
MRD Volume~3,000~4,700+56% QoQ

Key Drivers:

  1. Oncology ASP expansion: Average revenue per test reached $1,640 in Q4, with a clear pathway to >$2,200 as xT CDx migration and xF FDA clearance drive pricing power
  2. MRD volume acceleration: 4,700 tests in Q4 (+56% QoQ) signals the emerging MRD opportunity
  3. Data & Applications scale: Insights revenue grew 69.5% YoY excluding the prior year AstraZeneca warrant impact

Segment Breakdown

How Did the Segments Perform?

Diagnostics: $266.9M (+122% YoY)

The Diagnostics business drove the quarter, accounting for 73% of revenue :

Product LineQ4 2025 VolumeYoY GrowthQ4 ASP
Oncology NGS340,500 tests+29%$1,640
Hereditary125,000 tests+23%$800
MRD & Monitoring4,700 tests+56% QoQTBD

Key highlights:

  • Non-GAAP gross margin improved to 62.2% from 49.6% in Q4 2024
  • Paige Predict AI-powered digital pathology launched, analyzing H&E slides to predict 123 biomarkers across 16 cancer types
  • Strategic collaborations with NYU Langone Health and Northwestern Medicine announced

Data & Applications: $100.4M (+25% YoY)

Data licensing momentum continued with strong enterprise bookings :

  • Insights growth: +69.5% YoY (excluding AZ warrant impact)
  • Total Remaining Contract Value: >$1.1B
  • Net Revenue Retention: 126%
  • Non-GAAP gross margin: 74.5%

The AstraZeneca/Pathos foundation model collaboration continues to drive bookings, with management highlighting the "self-reinforcing platform" that generates proprietary data through diagnostics which feeds the data licensing and AI applications businesses .

What Did Management Guide?

Guidance Bridge

Management provided full 2026 guidance signaling continued strong growth and profitability inflection :

MetricQ1 2026FY 2026YoY Change
Revenue~$345M~$1.59B+25%
Adjusted EBITDA~-$5M~$65M+$72M

2026 Guidance Components:

  • Stock-based compensation: ~$200M
  • Interest expense: ~$60M
  • D&A: ~$120M
  • JV losses: ~$20M

Key ASP Catalysts for Oncology over the next several years :

  • xT CDx migration: ~$200 uplift (LDT ~$2,900 → CDx $4,500)
  • xF FDA clearance: ~$230 uplift
  • Broader commercial coverage: ~$150+ uplift
  • Target ASP: >$2,200 (vs $1,640 today)

Management expects "25% top-line growth over the next 3 years" and plans to reinvest the majority of incremental gross profit to accelerate platform expansion while still generating meaningful adjusted EBITDA and free cash flow .

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What Are the Key Risks?

  1. Hereditary growth moderation: Management expects hereditary testing growth to taper throughout 2026 as it laps market share gains from Q1 2025

  2. Q1 EBITDA seasonality: Q1 2026 adjusted EBITDA guided to ~-$5M, with "continued quarter over quarter improvement throughout 2026, similar to previous years"

  3. Stock compensation pressure: $200M annual SBC expense remains elevated relative to the company's market cap

  4. Macro headwinds: The stock declined 32.9% during Q4 amid trade tensions impacting healthcare technology

Capital Position and Balance Sheet

Tempus ended 2025 with a solid balance sheet :

MetricQ4 2025
Cash & Marketable Securities$759.7M
Total Remaining Contract Value>$1.1B
Net Revenue Retention126%

The company raised $750M in 0.75% convertible notes in 2025 to strengthen liquidity and reduce interest expense .

What's the Investment Case Now?

Bulls will point to:

  • Durable 25% growth outlook for 3+ years with visible operating leverage
  • ASP expansion runway from xT CDx migration and xF FDA clearance
  • Self-reinforcing platform with proprietary data moat
  • AI foundation model partnerships with pharma (AstraZeneca, Pathos) validate data value

Bears will point to:

  • Premium valuation (5.82x forward P/S vs 5.66x industry average)
  • Elevated stock-based compensation (~$200M annually)
  • Hereditary growth moderating after market share gains
  • 32.9% stock decline in Q4 despite strong fundamentals

Forward Catalysts to Watch

  1. Q1 2026 results: Hereditary growth trajectory and MRD volume continuation
  2. xF FDA clearance: Liquid biopsy filing expected, would drive ASP expansion
  3. Additional pharma partnerships: Data licensing bookings momentum
  4. Digital pathology traction: Paige Predict adoption driving testing integration
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See the full Q4 2025 earnings presentation and explore Tempus AI company profile.