Tempus AI’s TEM third-quarter 2025 results highlight the growing strategic importance of its Insights and Data & Services business, which is emerging as a high-margin and scalable revenue stream beyond traditional genomic testing. Data and Services revenues totaled $81.3 million, up 26.1% year over year, driven primarily by Insights (data licensing).
Insights bookings reached $150 million across multiple new contracts, reflecting 37.6% year-over-year revenue growth, building on the multi-hundred-million-dollar foundation model deal signed earlier this year. This momentum underscores how Tempus is monetizing its large multimodal dataset spanning genomic, clinical, imaging, and digital pathology information alongside AI-powered insights and algorithms.
The company further strengthened its data and AI capabilities through the acquisition of Paige, an AI leader in digital pathology, enhancing its dataset, technical expertise and footprint in this emerging field. It also expanded its collaboration with Northwestern Medicine to integrate David, Tempus’ generative AI clinical co-pilot, into the EHR platform to streamline and transform clinical workflows. Additionally, Tempus Next expanded into breast cancer, offering real-time insights to help clinicians close guideline-based care gaps, underscoring continued innovation across the Data and Services segment.
While long-term success hinges on retention, contract expansion, and broader adoption of AI-driven tools in clinical workflows, the trajectory suggests that the company is evolving from a testing-focused diagnostics company into a differentiated data-driven precision medicine platform with expanding recurring revenue potential.
Peer Update
SOPHiA GENETICS SOPH continued to scale its data platform, with usage increasing both through higher activity from existing customers and strong new customer additions. SOPH performed a record 99,000 analyses on its SOPHiA DDM platform, marking 9% year-over-year volume growth. Growth momentum was further supported by the onboarding of 31 new customers in the quarter. During the quarter, SOPHiA GENETICS also launched SOPHiA DDM Digital Twins, an AI-driven research technology designed to simulate patient-specific treatment outcomes and support more precise clinical decision-making.
ICON’s ICLR digital innovation strategy plays a key role in enhancing clinical delivery by integrating AI and key technology advancements into clinical research. In line with this, ICLR introduced two new AI-enabled tools, iSubmit and SmartDraft. iSubmit automates the clinical trial document management process primarily through managing electronic trial master files. SmartDraft streamlines the clinical contract drafting process during study startup, allowing sites to shorten overall startup times.
TEM’s Stock Price Performance
In the past year, Tempus shares have rallied 10% against the industry’s 4.1% decline. The S&P 500 composite has improved 12.3% in the same time.
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Expensive Valuation
TEM currently trades at a forward 12-month Price-to-Sales (P/S) of 8.18X compared with the industry average of 5.81X.
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TEM Stock Estimate Trend
In the past 30 days, Tempus AI's loss per share estimate for 2025 has narrowed 3 cents.
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TEM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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