Tempus AI (TEM) Q4 2025 Earnings Analysis
Tempus Fugit for Stock as Revenue Hits $367M
Key Takeaways
Tempus AI (TEM) reported Q4 2025 earnings with revenue of $367M, representing a +83.0% year-over-year change. The stock moved -6.9% on earnings day.
The bull case: Tempus’ proprietary multimodal data, accelerating oncology and data growth, and aggressive AI/foundation-model investments position it to become the dominant precision-medicine infrastructure provider with expanding margins over time.
The bear case: Intense AI competition, uncertain MRD reimbursement and scaling, moderating hereditary growth, and a strategy that prioritizes data breadth over near-term gross margin could prevent Tempus from converting strong top-line growth into durable, superior profitability.
Financial Highlights
- Revenue: $367M (+83.0% YoY)
- Gross Profit: $330M (89.7% margin, +28.9% YoY)
- Operating Income: $-62M (-17.0% margin, +8.3% YoY)
- Net Income: $-54M
- TTM Revenue: $1.3B
Stock Performance
- Earnings Day Move: -6.9%
- Year-to-Date: -13.5%
- 1-Year Return: -8.7%
- vs. S&P 500 (since earnings): -26.1%
- vs. Nasdaq (since earnings): -23.9%
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What Management Said
Here are the key debates and direct quotes from Tempus AI's Q4 2025 earnings call:
Durability and Drivers of Oncology Diagnostics Growth (Volumes, Mix, MRD, Liquid vs Tissue)
Sentiment: Positive
"Oncology, as Eric mentioned, had 29% growth in Q4. The first quarter is off to a good start, and so we're not seeing kind of that pace slowdown... Hereditary... we do anticipate that continuing to moderate... there will probably be some lumpiness, but we think that, that high teens is still achievable." — James Rogers
"Our guide implies 25% growth year-over-year... which means that our data business and our core Oncology Diagnostic business are growing 30-plus percent... Liquid is growing a little faster than solid... we're seeing really good solid growth... and more and more people want our connected platform that's intelligent." — Eric Lefkofsky
Competitive Moat and Strategic Role of AI / Foundation Models and Proprietary Data
Sentiment: Positive
"We have over 450 petabytes of connected multimodal data... real-time connection to outcome and response... rich molecular data, rich imaging data... if somebody wanted to replicate our data business, they'd have to go reproduce all that real-time data, which is quite hard to do... it's an enormous lift that we've been on over the last 10 years." — Eric Lefkofsky
"The foundation model had a deliverable in Q1 where we had to hit certain benchmarks that AstraZeneca had established. We think we've hit all those benchmarks... We've also procured a second cluster of more than 500 GB200... we're incredibly long on the value that these models are going to deliver, and we're doubling down on those efforts." — Eric Lefkofsky
ASP Expansion Path, Gross Margin Trajectory, and Panel Design Trade-offs
Sentiment: Positive
"ASPs in Q4 were around $1,640... we think that there's about $500 or greater than $500 of upside to ASP based on the current mix... the biggest impact from an ASP perspective in 2026 [is] continued migration of xT CDx from the LDT version to the FDA-approved version... we plan by the end of 2026 to be exiting with the vast majority of volume on that FDA-approved version." — James Rogers
"Any time ASP increases, that would lead to an increase in gross margin... we've long kind of taken the approach that as ASPs kind of increase or as cost of sequencing come down to reassess kind of how much you kind of increase the size of panels to generate more data... we're less reliant on maximizing gross profit within the Diagnostics kind of product line as some of our peers may be." — James Rogers
MRD Strategy, Reimbursement, and Market Share Potential
Sentiment: Positive
"We ran 4,700 tests. It's 56% quarter-over-quarter, not year-over-year, but quarter-over-quarter growth, and we are highly constraining this effort... we have a very small percentage of our cumulative sales force that is currently selling MRD. And if we were to let everyone sell it and completely unblock it, it could be 20x higher." — Eric Lefkofsky
"We're back and forth with MolDx now... it's possible that we have reimbursement in a month, and it's possible that it takes longer... it's just not that relevant to our current MRD offering, which is, I don't know, like 95% tumor-informed... I would suspect when we ungate this, we will become a very large MRD supplier." — Eric Lefkofsky
Visibility, Growth Quality, and Mix in the Data (Insights & Apps) Business
Sentiment: Positive
"Total contract value was greater than $1.1 billion and most importantly, has been rising faster than revenue... net revenue retention was 126%... we called out... that it is normal for us to generate about $100 million of revenue within a given year from bookings in the year... we start the year with greater visibility into the 2026 revenue build than we've ever had by a long shot." — Eric Lefkofsky
"The vast majority of our data and apps is data licensing. It represents the biggest chunk of it... that's our clinical trial matching business, TIME, our care gap product called Next and a few of the ancillary products... we just are starting the year super strong, and we just have got crazy amounts of demand for our data products." — Eric Lefkofsky
Bull Case
Tempus’ proprietary multimodal data, accelerating oncology and data growth, and aggressive AI/foundation-model investments position it to become the dominant precision-medicine infrastructure provider with expanding margins over time.
Bear Case
Intense AI competition, uncertain MRD reimbursement and scaling, moderating hereditary growth, and a strategy that prioritizes data breadth over near-term gross margin could prevent Tempus from converting strong top-line growth into durable, superior profitability.
Looking Ahead
With revenue growing +83.0% year-over-year, the key question is whether Tempus AI can sustain this growth trajectory, particularly around durability and Drivers of Oncology Diagnostics Growth (Volumes, Mix, MRD, Liquid vs Tissue). With operating margins at -17.0%, margin trends will remain a focal point. The market's negative earnings-day reaction signals that investors need to see stronger execution, and the next earnings report will be a key catalyst for the stock.
Frequently Asked Questions
What was Tempus AI's revenue in Q4 2025?
Tempus AI reported Q4 2025 revenue of $367M, representing a +83.0% year-over-year change.
Did Tempus AI beat earnings expectations in Q4 2025?
The stock declined -6.9% on earnings day, suggesting the results fell short of market expectations. The current bull case centers on: Tempus’ proprietary multimodal data, accelerating oncology and data growth, and aggressive AI/foundation-model investments position it to become the dominant precision-medicine infrastructure provider with expanding margins over time.
What is the bull case for TEM stock?
The bull case for TEM centers on: Tempus’ proprietary multimodal data, accelerating oncology and data growth, and aggressive AI/foundation-model investments position it to become the dominant precision-medicine infrastructure provider with expanding margins over time.
What is the bear case for TEM stock?
The bear case for TEM centers on: Intense AI competition, uncertain MRD reimbursement and scaling, moderating hereditary growth, and a strategy that prioritizes data breadth over near-term gross margin could prevent Tempus from converting strong top-line growth into durable, superior profitability.
How has TEM stock performed since its Q4 2025 earnings?
TEM moved -6.9% on the day of its Q4 2025 earnings report, underperforming the S&P 500 by +26.1% since earnings. Year-to-date, the stock has returned -13.5%.
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