TEM Q4 Earnings Miss, Revenues Beat, Stock Down in After-Market

Core Insights - Tempus AI, Inc. reported a fourth-quarter 2025 adjusted loss of 4 cents per share, an improvement from a loss of 16 cents in the same quarter last year, but wider than the Zacks Consensus Estimate by 66.7% [1] - The company’s revenues for the fourth quarter reached $367.2 million, surpassing the Zacks Consensus Estimate by 0.1% and reflecting an 83% year-over-year increase [2][7] - Full-year 2025 revenues totaled $1.27 billion, marking an 83.3% increase compared to the previous year [2] Revenue Breakdown - In the fourth quarter, Diagnostics generated revenues of $266.9 million, a significant 121.6% increase year-over-year, with Oncology volume growing by 29% and Hereditary volume by 23% [3] - The Data and Applications segment reported sales of $100.4 million, up 25.1% year-over-year, driven by a 69.5% growth in Insights (data licensing) [3] Margin and Operating Performance - Gross profit for the fourth quarter was $237.7 million, up 94.7% from the previous year, with an adjusted gross margin expanding by 391 basis points to 64.7% [4] - Total adjusted operating expenses were $259 million, an increase of 83.8% year-over-year, leading to an operating loss of $21.3 million compared to a loss of $18.8 million in the prior year [4] Liquidity Position - At the end of the fourth quarter of 2025, the company had cash and cash equivalents of $604.8 million, up from $340.9 million at the end of the fourth quarter of 2024 [5] - Cumulative net cash used in investing activities was $398.3 million, compared to $130.4 million a year ago [5] Future Outlook - For full-year 2026, the company expects revenues to reach $1.59 billion, indicating nearly 25% annual growth, with the Zacks Consensus Estimate for revenues at $1.56 billion [6][7] - Adjusted EBITDA for 2026 is projected to be $65 million [8] Market Reaction - Following the earnings announcement, shares of Tempus AI declined by 3.7% in after-market trading, reflecting investor concerns over the reported quarterly operating loss [2]