Tempus AI Raises 2025 Financial Outlook: What's Backing It?

Core Insights - Tempus AI (TEM) has raised its full-year 2025 revenue guidance to $1.25 billion, reflecting an 80% annual growth, and expects adjusted EBITDA of $5 million, an improvement of approximately $110 million over 2024 [2][9]. Financial Performance - In Q1, Tempus reported total sales of $255.7 million, a year-over-year increase of 75.4%, with gross profit rising 99.8% to $155.2 million [3][9]. - The adjusted EBITDA loss narrowed to $16.2 million from $43.9 million a year ago, indicating improved operational efficiency [3]. Strategic Collaborations - Tempus entered a three-year, $200 million agreement with AstraZeneca and Pathos to develop a multimodal foundation model in oncology, utilizing over 300 petabytes of healthcare data [4]. - This collaboration has increased the total remaining contract value to over $1 billion as of the end of April [4]. Growth in Hereditary Testing - Revenues from hereditary testing reached $63.5 million, driven by a 23% volume growth, surpassing initial guidance [5]. - The acquisition of Ambry Genetics is expected to enhance long-term growth potential in this segment, extending beyond oncology to other genetic predispositions [5]. Competitor Outlook - Exact Sciences (EXAS) anticipates 2025 revenues between $3.070 billion and $3.120 billion, with an adjusted EBITDA forecast of $425-$455 million, driven by the successful launch of Cologuard Plus [6]. - Exelixis (EXEL) raised its 2025 revenue guidance to $2.25-$2.35 billion following strong demand for CABOMETYX and recent FDA approvals [7]. Stock Performance - Tempus AI shares have increased by 58.6% over the past year, outperforming the industry growth of 16.8% and the S&P 500's 11% [10]. Valuation Metrics - Tempus currently trades at a forward Price-to-Sales (P/S) ratio of 7.09, compared to the industry average of 5.82 [11].