Tempus AI (NASDAQ: TEM) raised its full-year revenue guidance after a Q3 that beat top-line estimates and swung non-GAAP EPS positive for the first time. The company held its Adjusted EBITDA forecast steady at ~$65M. That choice tells investors more about management's priorities than the beat itself.
Revenue rose 23% to $411.5M, edging past the $409.4M consensus. Non-GAAP EPS came in at $0.07 versus a $(0.09) estimate and $(0.11) a year ago. The GAAP net loss narrowed to $(14.9)M from $(80.0)M, helped by $42.8M in unrealized gains on marketable securities. Adjusted EBITDA jumped to $25.6M from $1.5M, a 17x increase that reflects operating leverage finally showing through.
The headline number is the guidance. Tempus lifted its FY2026 revenue range to $1.60-$1.605B, implying ~25% annual growth and roughly $458-$463M in Q4. That's a confident signal from a company investing aggressively in scale. The EBITDA guide stayed put at ~$65M. With $25.6M already booked in Q3 and a typical seasonal ramp in Q4, the implied Q4 EBITDA of ~$39M would represent a 53% sequential increase. Management is signaling that the operating model can deliver that. They're not ready to promise more.
The revenue raise is underpinned by data licensing, which has become Tempus's most powerful growth engine. Year-to-date bookings exceeded $550M, anchored by two October deals: a BMS oncology data and models license worth up to $137.5M over five years, plus a $55M Alzheimer's/dementia data license with BMS and Pathos. The Merck/Moderna INT collaboration adds another multi-year revenue stream. Data & Applications revenue grew 33% to $108.1M, with the Insights sub-segment up 29%. This is the part of the business that drives high-margin, recurring revenue, and it's accelerating.
Diagnostics revenue rose 20% to $303.5M, but the composition matters. Oncology volume growth accelerated to 32%, while Hereditary growth slowed to 3%. MRD volume hit ~12,000 tests, up 300% from a year ago, though from a small base. The mix shift toward higher-value oncology and MRD testing is improving gross margins: non-GAAP diagnostics gross margin expanded to 63.5% from 61.7% a year ago. The data & apps gross margin hit 72.7%, up from 69.7%, as the licensing business scales with minimal incremental cost.
Cost discipline remains a work in progress. Total operating expenses rose 19% to $323.6M, but stock-based compensation accounted for $43.8M of that, or 13.5% of revenue. Excluding SBC and other adjustments, non-GAAP operating expenses grew 16%, roughly in line with revenue growth. The company ended the quarter with $854.4M in cash and marketable securities, giving it ample runway to fund the pending Personalis acquisition, which cleared regulatory review and faces a shareholder vote on Nov. 30.
The guidance raise without an EBITDA raise is the quarter's most revealing signal. Tempus is prioritizing top-line growth and market share capture over near-term profit maximization, a rational strategy for a company still building its data moat. But investors should watch whether the EBITDA guide becomes a ceiling or a floor. If Q4 delivers a material beat on the bottom line, the reiterated guide will look conservative. If it doesn't, the revenue growth is being bought with continued investment spend. The data licensing pipeline suggests the former is more likely. The guide says management isn't betting on it yet.