Key Points
-
Interested in Tempus AI, Inc.? Here are five stocks we like better.
-
Strong Q3 performance:Tempus AI reported $411.5 million in revenue, up 23% year over year, generated $25.6 million in adjusted EBITDA, and raised its 2026 revenue guidance to $1.60–$1.605 billion.
-
Oncology and data businesses drove growth:Diagnostics revenue rose 20%, led by a 28% increase in oncology revenue and 32% oncology volume growth, while data-and-applications revenue climbed 33% to $108.1 million.
-
Expansion could create future growth:Tempus announced major data collaborations worth up to $192.5 million over roughly five years and is preparing to expand its minimal residual disease business following the planned Personalis acquisition, though reimbursement and test profitability remain key uncertainties.
-
The AI Trade Just Moved Into Your Bloodstream, and 4 Healthcare Stocks Are Winning
Tempus AI (NASDAQ:TEM) reported third-quarter 2026 revenue of $411.5 million, up 23% from a year earlier, as growth in oncology diagnostics and data-and-applications services continued to drive results. The company also raised its full-year revenue outlook and said it generated positive adjusted EBITDA during the quarter.
Founder and Chief Executive Officer Eric Lefkofsky described the quarter as "incredibly strong," citing broad-based growth across the diagnostics and data-and-applications businesses. Tempus generated $25.6 million in adjusted EBITDA and ended the quarter with $854.4 million in cash and marketable securities.
Diagnostics growth led by oncology volumes
→ Starbucks Says Its Turnaround Is Done—The Numbers Make a Strong Case (With 1 Catch)
-
MarketBeat Week in Review – 02/23 - 02/27
Tempus' diagnostics business generated $303.5 million in third-quarter revenue, a 20% year-over-year increase. Oncology revenue rose 28% to $172.6 million, while oncology unit volume grew 32%. Hereditary cancer testing revenue totaled $111.3 million.
Lefkofsky said Tempus is seeing some of its strongest oncology unit-volume growth in years. He attributed demand for liquid biopsy testing in part to greater use of concurrent solid-tumor and liquid testing in metastatic patients, as well as repeat testing as treatments change over time.
→ MarketBeat Week in Review – 10/26 - 10/30
-
After a Near 50% Drop, Tempus AI Could Be Ripe for a Rebound
The company said xF order requisitions increased 25% year over year. Lefkofsky said liquid testing could become a growth driver relative to solid-tumor testing if recent trends continue, particularly alongside expanding minimal residual disease, or MRD, testing.
Management said it expects hereditary testing growth to stabilize as the business moves beyond comparisons with an unusually strong prior-year period. Lefkofsky said unit growth returned to the low-double-digit range in September and October. The company does not anticipate a material impact from PAMA-related pricing changes on hereditary cancer testing rates, according to Chief Financial Officer Jim Rogers.
→ 3 Robotics ETFs, 3 Different Ways to Bet on Humanoid Robots
On the oncology side, Rogers said updated pricing for Tempus' FDA-approved xT assay is expected to begin Jan. 1, 2027, when the company can migrate its remaining xT volume to the FDA-approved version. He said the change is expected to provide approximately $80 million of oncology average selling price uplift in 2027. Tempus also expects a further increase after its xF assay completes the FDA process, if approved.
Data and applications revenue rises 33%
Data-and-applications revenue increased 33% year over year to $108.1 million. The company's Insights data-licensing segment grew 29%.
Tempus announced a strategic collaboration with Bristol Myers Squibb under which it agreed to license oncology data and models for up to $137.5 million over five years. Bristol Myers Squibb, Pathos and Tempus also entered a collaboration to build datasets and models for Alzheimer's disease, with Pathos expected to pay Tempus $55 million over five years.
The agreements are expected to generate $192.5 million of additional data-and-applications revenue over roughly the next five years, Lefkofsky said. He added that the Alzheimer's collaboration represents the company's first large data agreement outside oncology and will support development of a dataset involving approximately 500,000 patients with Alzheimer's disease and late-stage dementia.
Tempus also announced a multiyear collaboration with Moderna and Merck to support the potential commercialization of an individualized neoantigen therapy being evaluated with KEYTRUDA in patients with resected stage IIB to IV melanoma and other cancer types.
Rogers said the company has increasingly shifted biopharma customers from episodic purchases toward longer-term strategic collaborations, providing greater revenue visibility. Lefkofsky said customers are also increasingly using Tempus' Lens platform and GPU infrastructure to analyze data and build AI models within the company's environment.
Personalis transaction and MRD expansion
Tempus said it cleared regulatory review for its pending acquisition of Personalis, with a shareholder meeting to approve the transaction scheduled for Nov. 30. Tempus has been the exclusive distributor of Personalis' NeXT tumor-informed MRD assay since 2023.
Lefkofsky said MRD is an estimated market of more than $20 billion and can help clinicians detect cancer recurrence earlier than conventional imaging. However, he said broader commercialization of the Personalis assay will depend primarily on reimbursement and test-level economics rather than the closing of the acquisition.
Personalis currently loses money on tests, Lefkofsky said, though reimbursement in three categories during 2026 has improved individual test economics. He said Tempus expects to increase MRD sales efforts during 2027, with a more significant ramp possible when the assay reaches positive gross-profit contribution per test. He suggested that point could come around the middle of 2027, though timing remains uncertain.
The company said it believes its existing provider relationships, diagnostic portfolio and technology platform can support its MRD commercialization efforts. Tempus said its infrastructure is connected to about 8,000 providers and that it has amassed more than 600 petabytes of data, including more than 50 petabytes added in the third quarter.
Guidance raised as company balances investment and profitability
Tempus raised its 2026 revenue guidance to a range of $1.60 billion to $1.605 billion. It maintained its expectation for approximately $65 million in adjusted EBITDA for the year.
Management said the company intends to continue reinvesting in growth rather than maximize near-term profitability. Rogers said Tempus generally plans to reinvest roughly two-thirds of incremental gross-profit dollars and allow about one-third to flow to the bottom line. The Personalis acquisition is expected to add losses initially, though Tempus expects adjusted EBITDA to continue improving even while absorbing those losses.
Lefkofsky said Tempus views long-term annual growth of 25% or more as a sustainable objective, while acknowledging that growth could be higher in certain periods as oncology pricing increases and the data business expands.
About Tempus AI (NASDAQ:TEM)
Tempus AI, Inc is a healthcare technology company that uses artificial intelligence and data analytics to support precision medicine. The company combines clinical, molecular and imaging data to help physicians make more informed treatment decisions and to help researchers and biopharmaceutical companies develop therapies.
Its offerings include genomic testing and analysis, such as tissue- and blood-based tests, as well as software tools designed to assist with clinical decision-making, patient matching for clinical trials and the management of healthcare data.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
The article " What Tempus AI (TEM) Said on Its Q3 Earnings Call " was originally published by MarketBeat.
