TLDR
- Q1 revenue reached $348.1M, marking a 36.1% year-over-year increase and surpassing the $345.4M consensus estimate
- The company delivered an adjusted EPS loss of $0.13, outperforming the expected $0.20 loss, though GAAP losses expanded to $0.70 per share
- FY2026 revenue outlook increased to $1.59–$1.60B, with the midpoint matching—but not exceeding—Street expectations
- Shares plunged 7.2% after hours following the earnings release, after closing regular trading at $54.07
- Wall Street maintains a “Moderate Buy” rating with a consensus price target of $71.36
Tempus AI (TEM) delivered better-than-expected results for its first quarter, yet shares tumbled 7.2% in extended trading Tuesday as investors reacted negatively to the company’s cautious full-year outlook.
For the three months ending March 31, the healthcare technology firm generated $348.1 million in revenue, representing a 36.1% year-over-year jump and exceeding the Wall Street consensus of $345.4 million. Shares closed at $54.07 during regular hours before sliding in after-market action.
On an adjusted basis, Tempus posted a per-share loss of $0.13, handily beating the anticipated $0.20 deficit. However, the GAAP loss per share widened significantly to $0.70—missing analyst projections.
The company’s net loss expanded to $125.9 million from $68.0 million during the same quarter last year. This figure encompassed $56.3 million in stock-based compensation expenses alongside $32.3 million in unrealized losses from marketable securities.
The Diagnostics division generated $261.1 million, up 34.7% from the prior year. Oncology test volumes increased 28%, while minimal residual disease (MRD) testing exploded approximately 500% year-over-year, reaching roughly 6,500 tests.
Data and Applications revenue climbed 40.5% to $87.0 million. The Insights component within this segment posted 44.1% growth. Notably, this marked the third consecutive quarter where bookings exceeded $100 million.
Gross profit surged 43.1% year-over-year to $222.0 million. Adjusted EBITDA losses narrowed to $2.8 million compared to a $16.2 million deficit in the comparable period.
Guidance Underwhelms
Tempus elevated its fiscal 2026 revenue projection to a range of $1.59–$1.60 billion, implying approximately 25% annual expansion. However, the $1.595 billion midpoint barely exceeded the analyst consensus of $1.592 billion—offering investors minimal upside surprise.
The adjusted EBITDA forecast remained unchanged at approximately $65 million for the year. Executives emphasized during the earnings call that no additional capital raises are anticipated and that free cash flow generation should strengthen in Q2.
Certain business segments showed weakness during the quarter. Hereditary testing decelerated, though leadership expects a return to mid-teens growth rates in the latter half of the year. Reimbursement challenges are also moderating the pace of MRD adoption.
Analyst and Insider Activity
Insider selling has been notable. Over the past three months, company insiders offloaded 563,471 shares valued at approximately $29.8 million. CAO Ryan Bartolucci and EVP Andrew Polovin were among executives who reduced positions in February.
Analyst sentiment remains divided. Needham maintains a Buy recommendation with a $75 price objective. Morgan Stanley trimmed its target from $85 to $70 while preserving an Overweight stance. Guggenheim reduced its target from $95 to $60, keeping a Buy rating. Jefferies launched coverage with an Underperform rating and $35 target.
The overall analyst consensus registers as “Moderate Buy” with an average price objective of $71.36, substantially above current trading levels.
Institutional buying has accelerated recently. Invesco expanded its holdings by more than 2,900%, while Royal Bank of Canada boosted its position by 201%.
The stock has traded between $41.73 and $104.32 over the past 52 weeks, with its 200-day moving average at $62.91.
