Tempus AI, Inc. TEM, a leader in precision medicine and AI-enabled diagnostics, announced preliminary financial results for the fourth quarter and fiscal 2024. The company also provided additional details at the 43rd Annual J.P. Morgan Healthcare Conference, including forward-looking plans for 2025, emphasizing growth across genomics, data services and applications. The company's shares fell 13.8% on Jan. 13 as the top line missed market expectations.
Tempus plans to report its complete fourth-quarter and full-year 2024 financial results during its firstearnings callof 2025.
Fourth-Quarter 2024 Performance
In the fourth quarter of 2024, Tempus continued its trajectory of growth, with revenues improving 35% year over year to approximately $200 million. The Zacks Consensus Estimate is pegged at $205.8 million.
TEM’s genomics business expanded approximately 30% and its data and services segment experienced a remarkable 45% increase from the previous year. These results underscore the effectiveness of Tempus’ integrated platform, which leverages real-time data from more than 2,500 institutions, including 65% of U.S. academic medical centers and 50% of oncologists in the United States. This robust connectivity enables Tempus to process vast amounts of molecular, clinical and imaging data to drive actionable insights in oncology, neuropsychology and cardiology.
Fiscal 2024 Highlights
For fiscal 2024, Tempus reported consistent growth across its key business lines. TEM is estimated to record $693 million in full-year sales, representing approximately 30% growth year over year. The Zacks Consensus Estimate is pegged at $698.5 million.
Tempus AI, Inc. Price
Tempus AI, Inc. price | Tempus AI, Inc. Quote
The company maintained strong partnerships with 19 of the 20 largest pharmaceutical companies globally, contributing to its approximately $940 million in remaining committed contract value for data licensing. Tempus also achieved a net revenue retention rate of 140% for its data services, reflecting high customer satisfaction and increasing adoption of its solutions.
Tempus further demonstrated its commitment to innovation with the launch of xM, a groundbreaking minimal residual disease (MRD) assay for colorectal cancer, in June last year. This introduction, alongside the expansion of its partnership with Personalis for tumor-informed MRD detection, positions Tempus at the forefront of diagnostics innovation. Earlier this month, TEM also announced a collaboration with Genialis, the RNA-biomarker company, to develop advanced RNA-based biomarker algorithms, which can improve the accuracy of diagnostics and the effectiveness of personalized treatments in precision medicine.
Strategic Acquisition of Ambry Genetics
In 2024, Tempus announced its intent to acquire Ambry Genetics, a strategic move to enhance its capabilities in hereditary cancer screening and expand its reach into new therapeutic areas such as pediatrics, rare diseases and cardiology. This acquisition, expected to close on Feb. 1, 2025, will also strengthen Tempus’ West Coast laboratory infrastructure and augment its data collection capabilities with Ambry’s sequencing of more than 400,000 patients annually.
2025 Outlook
Tempus anticipates robust growth in 2025, with revenue projected to exceed $1.23 billion, reflecting more than 75% year-over-year growth. The combined Tempus and Ambry businesses are expected to grow approximately 25% over 2024 levels, with Tempus itself approaching a 30% growth rate. This expansion will be fueled by continued advancements in AI-enabled diagnostics, the rollout of new genomic assays and deeper integration of multimodal data into its platform. Tempus also expects to achieve positive adjusted EBITDA in 2025, a significant milestone in its journey toward sustainable profitability.
Our Take
Tempus’ strong performance in 2024 and its ambitious plans for 2025 highlight the company’s commitment to transforming healthcare through precision medicine and AI. With its expanding platform, groundbreaking diagnostic tools and strategic acquisition of Ambry Genetics, Tempus is poised to lead the next wave of innovation in AI-driven healthcare solutions.
Price Performance
Shares of the company have declined 30.6% in the past three months compared with the industry’s flat move and the S&P 500’s 5.9% growth.
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Zacks Rank & Stocks to Consider
Tempus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and Abbott Laboratories ABT.
Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 31.7% against the industry’s 1% decline in the past three months.
Accuray, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.
ARAY’s shares have gained 19.8% against the industry’s 0.4% decline in the past three months.
Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.
ABT’s shares have declined 2.5% in the past three months compared with the industry’s 2.9% decrease.
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