Tempus AI (TEM) stock analysis: valuation and financials

Business quality scorecard

• Growth100
• Profitability0
• Cash flow7
• Balance sheet67
• Capital allocation0
• Innovation66
• Valuation0

0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.

How it makes money

Insurers, patients, and pharmaceutical companies pay for diagnostic testing (75.1% of revenue), while pharmaceutical companies separately pay for data licensing and trial matching; segment profit is not disclosed, FY2025 operating margin was -19.9%, and the data business has a higher gross margin but no quantitative disclosure is provided.

Financials by year

Amounts in USD · What is free cash flow?

Margins Operating margin narrowed from -99.7% in FY2024 to -19.9% in FY2025, TTM -19.8%, and Q2 FY2026 was -19.9%, with net income of US$5.6 million turning positive for the first time; the main reasons were share-based compensation falling from US$534.1 million to US$124.7 million and revenue growth of 83.4% diluting SG&A; gross margin was not disclosed in the data.

• Cash flow ConcernTTM operating cash flow was -US$237.4 million and free cash flow was -US$263.2 million, with an FCF margin of -18.4%; FY2025 operating cash flow of -US$218.1 million was slightly better than net income of -US$245.0 million, with the difference mainly from non-cash share-based compensation and depreciation and amortization.
• Debt LowNet debt was -US$599.6 million (i.e., net cash of US$599.6 million, with cash also US$599.6 million); leverage status is net cash, about 4.7% of the US$12.74 billion market capitalization; the balance sheet has no interest-bearing net debt pressure.

Balance sheet Leverage · Net cash

Cash & short-term investments

$599.6M

Total debt

—

Net cash

$599.6M

Current ratio

3.3x

As of Jun 30, 2026 · Amounts in USD · How to read a balance sheet

Management and track record

• Management AdequateStrong execution: FY2025 revenue of US$1.272 billion, +83.4% year over year, operating margin narrowed from -99.7% to -19.9%, three-year revenue CAGR of 58.3%
• Credibility MediumRevenue guidance is credible: FY2025 actual was US$1.272 billion, above the November guidance of about US$1.265 billion and the August guidance of about US$1.26 billion, with full-year growth of 83.4%; FY2026 guidance was raised twice to US$1.595 billion–US$1.605 billion.

Of 2 guided figures checked: 2 beat, 0 in range, 0 missed.

Valuation range

Implied value per share · Price when researched: $70.17

Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.