Shares of Tempus AI (TEM) experienced a significant 24-hour plunge of 6.50% on Tuesday, following the release of the company's third-quarter 2025 financial results. Despite reporting better-than-expected earnings and strong revenue growth, investors appeared concerned about the company's path to profitability.

Tempus AI reported a quarterly adjusted loss of 11 cents per share, beating analyst expectations of a 17-cent loss. Revenue surged 84.7% year-over-year to $334.21 million, surpassing the consensus estimate of $328.73 million. The company also increased its full-year 2025 revenue guidance to approximately $1.265 billion, representing about 80% growth year-over-year.

However, the market's negative reaction seems to stem from concerns about Tempus AI's near-term profitability. The company expects Q4 Adjusted EBITDA of $20 million, resulting in only slightly positive Adjusted EBITDA for the full year. Additionally, the recent acquisition of Paige, an AI company specializing in digital pathology, is anticipated to increase losses by approximately $5 million per quarter. These factors may have dampened investor enthusiasm despite the strong top-line growth and narrower-than-expected losses.