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Introduction & Market Context
Tempus AI Inc (NASDAQ:TEM) presented its Q1 2025 investor presentation on May 6, highlighting substantial revenue growth and significant progress toward profitability. The precision medicine company, which has seen its stock price fluctuate recently, is positioning itself at the intersection of artificial intelligence and healthcare, with a particular focus on diagnostics.
Following the earnings release, Tempus AI stock showed positive movement in after-hours trading, rising 6.2% to $55.42 after closing the regular session down 3.48% at $54.07. The company’s shares have experienced volatility in recent months, trading within a 52-week range of $22.89 to $91.45.
Quarterly Performance Highlights
Tempus AI reported impressive financial results for Q1 2025, with total revenue reaching $255.7 million, representing a 75.4% increase compared to the same period last year. Gross profit showed even stronger growth, jumping 99.8% year-over-year to $155.2 million, indicating expanding margins.
As shown in the following comprehensive performance summary:
Despite the strong top-line growth, Tempus AI still reported a loss from operations of $(68.7) million and a net loss of $(68.0) million. However, the company highlighted its progress toward profitability, with adjusted EBITDA improving to $(16.2) million, suggesting the company is approaching breakeven on this metric.
The earnings highlights demonstrate strong performance across all business segments:
Business Segment Performance
Tempus AI’s business is divided into several key segments, with genomics representing the largest revenue contributor. Genomics revenue reached $193.8 million in Q1 2025, an 88.9% increase year-over-year, driven by growth in both oncology and hereditary testing.
The company’s oncology testing business has shown consistent growth over recent years, with both volume and revenue per test increasing substantially:
Hereditary testing has also emerged as a growth driver, with test volumes increasing from approximately 63,500 in Q1 2024 to 78,000 in Q1 2025, representing a 23% unit growth. The average reimbursement per hereditary test in Q1 2025 was $770.
The data and services segment, which licenses de-identified clinical, molecular, and imaging data to life sciences companies, grew 43.2% year-over-year. This segment benefits from strong customer retention, with data licensing retention at approximately 140% by the end of 2024 and a total remaining contract value exceeding $940 million.
Strategic Initiatives & Partnerships
A key strategic development highlighted in the presentation was Tempus AI’s collaboration with AstraZeneca (NASDAQ:AZN) and Pathos AI to develop what the company describes as the largest multimodal foundation model in oncology. This non-exclusive partnership includes $200 million in fees and leverages Tempus’ extensive oncology data assets.
The collaboration aims to unlock precision medicine capabilities through multimodal data analysis:
Tempus AI also announced several other strategic initiatives during Q1 2025, including a collaboration with Illumina (NASDAQ:ILMN) to combine AI technologies, the national launch of xT CDx, and the acquisition of Deep6 AI. Additionally, the company launched Olivia, an AI-enabled personal health application.
The company emphasized its substantial data assets as a competitive advantage, noting connections to approximately 4,000 healthcare institutions, including over 65% of Academic Medical (TASE:BLWV) Centers and more than 50% of oncologists in the U.S. Tempus AI claims to have amassed over 300 petabytes of healthcare data, including approximately 40 million patient records and 3 million sequenced samples.
2025 Guidance & Outlook
Looking ahead, Tempus AI provided optimistic guidance for 2025, projecting revenue of approximately $1.25 billion, which would represent an 80% year-over-year increase. More significantly, the company expects to achieve adjusted EBITDA of approximately $5 million, marking a $110 million improvement over 2024 and representing a milestone shift to profitability on this metric.
The company’s long-term strategy centers on leveraging its proprietary data assets and AI capabilities to transform precision medicine. Tempus AI highlighted its approach through integrated product lines spanning genomics, data services, and applications, creating what it describes as network effects that allow effective monetization of both products and data.
The company’s revenue and adjusted EBITDA trajectory shows consistent improvement over recent years:
As Tempus AI continues to expand its AI-driven healthcare offerings, it emphasized the potential of its technology to enhance precision medicine through improved diagnostics, therapy matching, and clinical decision support. The company’s presentation concluded with a demonstration of its AI interface, showcasing how users can interact with the platform to access healthcare insights.
With its strong Q1 2025 performance and ambitious outlook for the full year, Tempus AI appears positioned to capitalize on the growing intersection of artificial intelligence and healthcare, though investors will be watching closely to see if the company can deliver on its promise of reaching adjusted EBITDA profitability by the end of 2025.
Full presentation:
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