8-K: Tempus AI Q3 Revenue Jumps 84.7%, Achieves Positive Adj. EBITDA

Tempus AI, Inc. reported strong third-quarter 2025 financial results, with revenue growing 84.7% year-over-year and achieving positive adjusted EBITDA.

Summary

• Revenue grew 84.7% year-over-year to $334.2 million in the third quarter of 2025.
• Gross profit reached $209.9 million, an improvement of 98.4% year-over-year.
• 217,000 clinical tests were delivered in the quarter, representing 33% year-over-year volume growth, with Oncology volume growing 27% and Hereditary at 37%.
• Insights bookings totaled $150 million across multiple new contracts, with year-over-year revenue growth of 37.6% in the quarter.
• Adjusted EBITDA was $1.5 million in Q3 2025, a significant improvement from ($21.8 million) in Q3 2024.
• Net loss for the quarter was ($80.0 million), compared to ($75.8 million) in Q3 2024, including $35.0 million in stock compensation and a $12.0 million loss on debt extinguishment.
• Ended the quarter with $764.3 million of cash and marketable securities.
• Full year 2025 revenue guidance was increased to $1.265 billion, representing approximately 80% growth year-over-year.
• Acquired Paige, an AI company specializing in digital pathology.
• Selected by Advanced Research Projects Agency for Health (ARPA-H) for its ADAPT program.
• Obtained U.S. FDA 510(k) clearance for xR IVD, Tempus Pixel, and Tempus ECG-Low ejection fraction software.
• Expanded collaboration with Northwestern Medicine to integrate David, Tempus' generative-AI clinical co-pilot.
• Expanded Tempus Next into breast cancer, providing real-time insights to close guideline-based care gaps.

Sentiment

Score: 8

Explanation: The company demonstrated exceptional revenue growth, achieved a critical milestone of positive adjusted EBITDA, and raised its full-year guidance. Strategic acquisitions and multiple FDA clearances further strengthen its market position in the high-growth precision medicine and AI in healthcare sectors. While net loss increased, the underlying operational improvements and strong cash position suggest a robust growth trajectory.

Positives

• Revenue grew significantly by 84.7% year-over-year to $334.2 million in Q3 2025.
• Gross profit improved by 98.4% year-over-year, reaching $209.9 million.
• Achieved positive Adjusted EBITDA of $1.5 million in Q3 2025, a substantial turnaround from a ($21.8 million) loss in Q3 2024.
• Increased full year 2025 revenue guidance to $1.265 billion, representing approximately 80% annual growth.
• Strong cash and marketable securities balance of $764.3 million at quarter-end.
• Clinical test volume grew 33% year-over-year, with Oncology volume accelerating to 27% and Hereditary at 37%.
• Insights bookings of $150 million and 37.6% year-over-year revenue growth in data and services.
• Strategic acquisition of Paige, expanding capabilities in AI digital pathology.
• Secured a significant partnership with ARPA-H for the ADAPT program.
• Received multiple U.S. FDA 510(k) clearances for advanced diagnostic tools (xR IVD, Tempus Pixel, Tempus ECG-Low ejection fraction software).
• Expanded key collaborations and product offerings, including with Northwestern Medicine and Tempus Next for breast cancer.

Negatives

• Net loss increased to ($80.0 million) in Q3 2025 from ($75.8 million) in Q3 2024.
• Loss from operations increased to ($60.996 million) in Q3 2025 from ($53.616 million) in Q3 2024.
• The net loss includes $35.0 million in stock compensation expense and related employer payroll taxes.
• Increased amortization expense of intangibles related to the Ambry acquisition contributed to losses.
• A one-time $12.0 million expense was incurred related to the loss on debt extinguishment.
• The acquisition of Paige is expected to increase losses by approximately $5 million per quarter in Q4.

Risks

• Risks related to the intended use of products and services.
• Uncertainties regarding financial performance.
• Challenges in attracting and retaining customers and partners.
• Difficulties in managing growth and future expenses.
• Intense competition and potential new market entrants.
• Compliance with new laws, regulations, and executive actions, including evolving regulations in the artificial intelligence space.
• Ability to maintain, protect, and enhance intellectual property.
• Ability to attract and retain qualified team members and key personnel.
• Ability to repay or refinance outstanding debt, or to access additional financing.
• Risks associated with future acquisitions, divestitures, or investments, including the ability to realize expected benefits from the Paige AI, Ambry Genetics, and Deep 6 AI acquisitions.
• Potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, trade tensions and tariffs, and war or other armed conflict.

Future Outlook

Tempus increased its full year 2025 revenue guidance to approximately $1.265 billion, representing about 80% annual growth. Despite the acquisition of Paige, which is expected to increase losses by approximately $5 million per quarter, the company anticipates Q4 Adjusted EBITDA to be around $20 million, leading to a slightly positive Adjusted EBITDA for the full year.

Management Comments

• "Not only are we growing at an incredible rate, reaching positive adjusted EBITDA marks an important milestone and reflects the strength of our underlying business."
• "One of the hardest things to do, and a sign of business model endurance, is being able to slow down the rate of reinvesting back into the business and still maintain growth, which is exactly what we achieved this quarter."

Industry Context

Tempus AI operates at the forefront of precision medicine, leveraging artificial intelligence to enhance patient care. The company's strong growth in genomics and data services, coupled with strategic acquisitions like Paige in digital pathology and multiple FDA clearances for AI-powered diagnostic tools, aligns with the broader healthcare industry's shift towards personalized, data-driven treatment and digital transformation. Its focus on building one of the world's largest libraries of multimodal data positions it well within the competitive landscape of AI in healthcare.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry benchmarking.

Related Party Transactions

• Related party revenue of $25,132 thousand for the three months ended September 30, 2025, and $41,671 thousand for the nine months ended September 30, 2025.
• A related party asset of $5,660 thousand (current portion) and $19,340 thousand (less current portion) as of September 30, 2025.
• Related party accounts receivable of $6,639 thousand as of September 30, 2025.
• Related party deferred revenue of $19,918 thousand as of September 30, 2025.

Stakeholder Impact

• Shareholders: Positive financial results, increased guidance, and strategic growth initiatives could lead to increased shareholder value, despite an increased net loss.
• Employees: The acquisition of Paige expands the technical team, potentially creating new opportunities and requiring integration efforts.
• Customers: Expanded product offerings, AI-powered diagnostics, and collaborations aim to improve patient care and clinical workflows.
• Partners: Collaborations with entities like ARPA-H and Northwestern Medicine strengthen strategic alliances and expand market reach.
• Creditors: Significant debt and convertible notes indicate reliance on financing, but strong cash position and revenue growth may mitigate immediate concerns.

Next Steps

• Host a conference call and webcast on November 4, 2025, at 4:30 p.m. Eastern Time to discuss the financial results.
• Continue to integrate the acquired Paige AI and realize the expected benefits from all acquisitions.
• Focus on attracting and retaining customers and partners.
• Manage growth and future expenses effectively.
• Ensure compliance with new and evolving regulations, particularly in the artificial intelligence space.
• Maintain, protect, and enhance intellectual property.
• Attract and retain qualified team members and key personnel.
• Address the ability to repay or refinance outstanding debt, or to access additional financing as needed.

Key Dates

Recommendation

Tempus AI has demonstrated exceptional operational and financial performance, marked by robust revenue growth, a pivotal shift to positive adjusted EBITDA, and an upward revision of its full-year guidance. Strategic acquisitions and multiple FDA clearances solidify its leadership in the high-growth precision medicine and AI in healthcare sectors. While the GAAP net loss increased, the underlying business momentum, strong cash position, and strategic advancements indicate a compelling investment opportunity for long-term growth.

Keywords

Precision Medicine, AI in Healthcare, Genomics, Oncology, Hereditary Testing, Digital Pathology, FDA Clearance, Clinical Diagnostics, Data Licensing, Biotechnology, NASDAQ: TEM, Tempus AI