Tempus AI Q4 Earnings: Revenue Miss, EPS Beat, Strong Guidance, Shares Move Lower

Tempus AI Inc. (TEM) reported its fourth-quarter financial results after the market close on Monday, with a mixed bag of outcomes that sent shares lower in after-hours trading. The AI-focused precision medicine and patient care company missed revenue estimates but beat earnings per share (EPS) expectations, while also providing strong guidance for 2025. Here's a breakdown of the key metrics and what they mean for the company's growth prospects.

Revenue Miss: Tempus AI reported fourth-quarter revenue of $200.68 million, missing estimates of $203.12 million. This miss can be attributed to a few factors, including a departure from historical trends of beating revenue expectations, a discrepancy between analyst expectations and actual results, slower growth in the genomics segment, and potential short-term disruptions from the Ambry Genetics acquisition. Despite the miss, the company's revenue grew by 35.8% year-over-year, indicating strong underlying growth.

EPS Beat: Tempus AI reported an adjusted loss of 18 cents per share in the fourth quarter, beating analyst estimates of a loss of 20 cents per share. This beat can be attributed to strong revenue growth, improved gross profit margin, positive Adjusted EBITDA trend, successful acquisition and integration, and operational highlights. The company's focus on expanding its customer base, increasing market penetration, and optimizing its revenue streams has contributed to its strong financial performance.



Strong Guidance: Tempus AI expects full-year 2025 revenue of approximately $1.24 billion for its consolidated Tempus and Ambry Genetics business, representing approximately 79% annual growth. The company also anticipates a full-year 2025 Adjusted EBITDA of $5 million, an improvement of approximately $110 million over 2024. This strong guidance reflects the company's growth prospects and market positioning, driven by investments in AI and precision medicine, strong core businesses, acquisitions and partnerships, regulatory approvals and reimbursement rates, and growing network and provider connections.

Shares Move Lower: Despite the EPS beat and strong guidance, Tempus AI shares were down 7.63% after hours, trading at $64 at the time of publication Monday. This decline can be attributed to the revenue miss and potential investor concerns about the company's ability to maintain its growth trajectory. However, the company's strong guidance and strategic initiatives suggest that it remains well-positioned for growth in the long run.

In conclusion, Tempus AI's Q4 earnings report showed a mixed performance, with a revenue miss but an EPS beat and strong guidance for 2025. While shares moved lower in after-hours trading, the company's strategic initiatives and growth prospects suggest that it remains well-positioned for long-term success. Investors should closely monitor the company's progress and potential catalysts for growth as it continues to execute on its strategic objectives.