Tempus AI's Revenue Surge Fails to Soothe Investor Jitters Over Deepening Losses

Tempus AI beats Q1 revenue estimates with 36% growth to $348M, but shares drop 10% as net loss nearly doubles to $126M; adjusted EBITDA improves and full-year guidance reaffirmed.

Tempus AI delivered a standout performance in the first quarter of 2026, with revenue climbing 36.1 percent to $348.1 million and comfortably beating analyst forecasts. Yet the market response was anything but celebratory, as shares tumbled roughly 10 percent on Wednesday to €41.80, reflecting growing unease over the company's widening net losses.

The diagnostics division remains the engine of growth, with revenue jumping approximately 35 percent to $261.1 million. A standout performer was the minimal residual disease (MRD) testing segment, where volumes surged 500 percent year-over-year. The data business also flexed its muscles, posting a gain of more than 40 percent, fueled by deeper ties with pharmaceutical heavyweights including Merck and Gilead Sciences.

But the headline numbers tell only part of the story. On a GAAP basis, the net loss ballooned to $125.9 million, nearly double the $68 million recorded in the same period last year. Stock-based compensation accounted for a significant chunk of that red ink. Strip out those one-off items, however, and the picture brightens considerably: adjusted EBITDA improved to a loss of just $2.8 million, while the adjusted loss per share of $0.13 came in better than feared.

Operationally, the company is making strides beyond its oncology roots. A new partnership with Lucent Diagnostics targets early detection of Alzheimer's disease, while a collaboration with Medtronic demonstrated that AI-driven clinical insights can boost treatment rates for heart valve conditions by 40 percent. The pipeline of large contracts is also thickening, with multiple pharma deals each exceeding $100 million in value.

Management remains confident in the trajectory, reaffirming full-year guidance for revenue of up to $1.6 billion and targeting adjusted EBITDA of roughly $65 million. TD Cowen recently lifted its price target from $65 to $68, and analysts expect the company to generate positive free cash flow by year-end.

The stock has recovered some ground over the past month, climbing nearly 16 percent from its April lows to €46.51, though it remains well below levels seen a year ago. With more than $640 million in cash on hand, the balance sheet provides ample runway. All eyes now turn to the investor day scheduled for late May, where the management team is expected to unveil details on long-term strategy and the latest iteration of its pan-cancer algorithm.