Tempus AI (NASDAQ:TEM) grew third-quarter revenue 23% to $411.5 million and raised its 2026 revenue outlook. Shares rose about 3.9% in pre-market trading. But the net loss narrowed to $14.9 million from $80.0 million, largely because of $42.8 million in unrealized gains on marketable securities. The operating loss barely moved, so the core business still spends more than it earns.
Key Numbers
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
-
Revenue: $411.5 million, up 23%.
-
Data and Applications revenue: $108.1 million, up 33%.
-
Loss from operations: $56.9 million, versus $61.0 million a year earlier.
-
Adjusted EBITDA: $25.6 million, versus $1.5 million a year earlier.
What It Means
Data and Applications is where the margin gains come from. It earns a gross margin above 71%, well ahead of testing, so faster growth there lifts companywide margin.
Most of the net loss improvement is non-operating. Gains on stock Tempus holds run through the income statement and can reverse in any quarter, so treat that part as paper, not progress.
Adjusted EBITDA looks strong because it adds back stock-based pay, which was about $48 million. That cost is real, since it dilutes owners.
What to Watch Next
Revenue guidance rose, but the adjusted EBITDA outlook held at about $65 million. That implies about $34 million in the fourth quarter, up from $25.6 million, so check whether it arrives. Also watch whether Hereditary testing revenue, up just 3%, picks up.
Should you buy stock in Tempus AI right now?
Before you buy stock in Tempus AI, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tempus AI wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $334,793!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,257,420!*
Now, it’s worth noting Stock Advisor’s total average return is 874% — a market-crushing outperformance compared to 209% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
