Tempus AI shares dipped in premarket trading Wednesday after the company reported first-quarter results that beat expectations on both revenue and earnings. But beneath the stock price action, the numbers tell a story of a company whose AI-driven diagnostics and data business is gaining serious traction—especially with Big Pharma.

The Chicago-based precision medicine company posted Q1 2026 revenue of $348.1 million, up 36.1% from $255.7 million a year ago and ahead of the $345.5 million analysts were looking for. Adjusted loss came in at $0.13 per share, better than the expected $0.19 loss. Not bad for a company that's still investing heavily in growth.

Diagnostics revenue rose 34.7% to $261.1 million, powered by 28% growth in oncology testing volumes. The data and applications segment—the part of the business that gets pharma companies excited—climbed 40.5% to $87 million. Tempus also recorded its third straight quarter of bookings above $100 million, with improving total contract value and what the company calls "record visibility" in its data segment.

On the profitability front, Tempus reported a net loss of $125.9 million, or $0.70 per share, wider than the $68 million loss a year ago. But adjusted EBITDA loss improved dramatically to just $2.8 million from $16.2 million, suggesting the path to profitability is getting shorter. The company ended the quarter with $643.8 million in cash and marketable securities.

"Our strong financial and operational performance this quarter underscores the accelerating demand for our AI-driven diagnostic platform and the immense value of our multimodal data and corresponding AI models," founder and CEO Eric Lefkofsky said in the earnings release.

Tempus raised its full-year 2026 revenue guidance to a range of $1.59 billion to $1.60 billion, up from prior guidance of $1.59 billion and in line with analyst estimates of $1.592 billion. The company kept its adjusted EBITDA outlook at about $65 million.

On the earnings call, Lefkofsky highlighted that oncology diagnostics remain the primary growth driver. Solid tumor and liquid biopsy testing performed strongly, and minimal residual disease test volumes jumped about 500% year-over-year to roughly 6,500 tests. Hereditary testing softened as expected due to tough comparisons, but Lefkofsky said growth in that segment should rebound to the mid-teens range in the second half of the year.

But the really interesting stuff is happening in the data licensing and AI modeling business. Tempus announced a new strategic collaboration with Merck & Company, Inc. (MRK) focused on biomarker discovery and development using Tempus' multimodal data and Lens analytical platform. Lefkofsky said this deal ranks among the company's largest strategic data and AI modeling partnerships, alongside existing deals with AstraZeneca PLC (AZN), GSK plc (GSK), and Bristol Myers Squibb (BMY).

Tempus also expanded its work with Gilead Sciences, Inc. (GILD). While smaller than the Merck deal, Lefkofsky said it represents a significant increase from prior engagement levels.

Lefkofsky described these agreements as designed to create long-term "sticky" relationships through broad data access, dedicated teams, and AI model development. He noted that Tempus now has "almost half a dozen" large pharmaceutical customers signing agreements worth more than $100 million each, tied to de-identified data licensing and AI model development.

Beyond pharma, Tempus announced collaborations with Northwestern Medicine and NYU Langone Health aimed at expanding genomic testing access and advancing AI-powered oncology research.

As for the stock, Tempus AI shares were down 4.98% at $51.38 in premarket trading Wednesday. Sometimes the market needs a moment to digest good news.