Quick Read
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TEM shares are down 20% ahead of Nov. 2 earnings, with a $1.5 billion Personalis (PSNL) acquisition hinging on core business strength.
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Data and Applications revenue jumped 28% with roughly $200 million in new bookings from pharma partners including BioNTech (BNTX) and Incyte (INCY).
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Despite beating estimates in each of its last four reports, TEM stock fell on all four earnings days as investors look past the numbers.
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Tempus AI( NASDAQ:TEM ) reports third-quarter results around Nov. 2. The company has a $1.5 billion Personalis( NASDAQ:PSNL ) deal pending, and shares are down 20.36% over the past month. This report has to show the core business can carry that acquisition.
Strong Beats Meet a Skeptical Stock
Last quarter, revenue rose 21.6% to $382.49 million, ahead of the $379.54 million estimate. Adjusted EPS of -$0.04 beat the -$0.1517 consensus, which made it Tempus' sixth straight EPS beat. GAAP net income came in at $5.6 million, with help from $98.5 million in unrealized gains on securities.
Full-year revenue guidance was raised to $1.595 billion to $1.605 billion, and adjusted EBITDA of about $65 million was maintained. On July 20, Tempus agreed to buy Personalis for its ultrasensitive MRD technology. The deal should close in late Q4 2026 or early 2027, and current guidance leaves it out.
In the 30 days after the Q2 report, shares rose 41.94%, and they have since pulled back. The stock sits at $67.70, up 14.65% year to date.
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Wall Street Expects a Narrower Loss on 22% Growth
| Metric |
Consensus |
Year-Ago |
Implied Change |
|---|---|---|---|
| Q3 Normalized EPS |
-$0.0772 |
-$0.11 |
Loss narrows 29.8% |
| Q3 Revenue |
$409.37 million |
$334.21 million |
+22.5% |
| FY2026 EPS |
-$0.2603 |
-$0.61 |
Loss narrows 57.3% |
| FY2026 Revenue |
$1.595 billion |
$1.272 billion |
+25.4% |
Data Bookings and MRD Volumes Will Set the Tone
Data and Applications revenue rose 28% to $93.2 million, and roughly $200 million in bookings came from BioNTech( NASDAQ:BNTX ), Daiichi Sankyo, LevelSet Bio and Incyte( NASDAQ:INCY ). CEO Eric Lefkofsky said, "the data business is just on fire." Q3 bookings need to keep that rate, since this high-margin line depends on pharma R&D budgets.
MRD comes next. Personalis' NeXT volumes grew from 6,500 tests in Q1 to 9,000 in Q2, while only about 10% of Tempus' sales force was selling the test. Sequential growth this quarter will show how much momentum Personalis brings at closing.
In core diagnostics, oncology volume growth sped up to 31% and gross margin expanded to 62.6% from 58.8%. Hereditary grew only 5%, so any lift from the GenomeNext launch matters.
Financing details are worth tracking, too. Lefkofsky prefers paying close to half of the price in cash and the rest in stock, backed by a debt facility. Stock-based compensation already reached $54.1 million last quarter, so the dilution math matters. Finally, full-year revenue consensus lands at the low end of guidance, which leaves room for another raise.
A Clean Quarter Could Reframe the Personalis Deal
Tempus beat estimates in each of its last four reports, yet the stock closed lower on all four of those earnings days. Investors have looked past the beats. Management needs to show the core business can fund the MRD ramp while still hitting $65 million in adjusted EBITDA and positive free cash flow by year-end. If it can, the $1.5 billion question gets a much clearer answer.
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