Tempus AI, Inc. Earnings Per Share Disclosure
Basic net loss per share is calculated by dividing the net loss by the weighted average number of outstanding shares of Common Stock each period. The Company’s Class A common stock and Class B common stock share equally in distributed and undistributed earnings; therefore, no allocation to participating securities or dilutive securities is performed. Diluted net loss per share is calculated by giving effect to all potential dilutive Common Stock equivalents, which includes stock options, RSUs, RSAs, PSUs, and preferred stock. Because the Company incurred net losses each period, the basic and diluted calculations are the same. The Company used the if-converted method to calculate diluted EPS. As the Company had net losses in the years ended December 31, 2025, 2024 and 2023, respectively, all potentially dilutive common stock equivalents have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.
The following table presents the calculation for basic and diluted net loss per share (in thousands, except share and per share data):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|
|||
Net loss |
|
$ |
(245,028 |
) |
|
$ |
(705,809 |
) |
|
$ |
(214,118 |
) |
Accretion of convertible preferred stock to redemption value |
|
|
— |
|
|
|
— |
|
|
|
(4,338 |
) |
Dividends on Series A, B, B-1, B-2, C, D, E, F, G, G-3, and G-4 preferred shares |
|
|
— |
|
|
|
(39,347 |
) |
|
|
(44,497 |
) |
Cumulative undeclared dividends on Series C preferred shares |
|
|
— |
|
|
|
(1,174 |
) |
|
|
(3,011 |
) |
Net loss attributable to common stockholders |
|
$ |
(245,028 |
) |
|
$ |
(746,330 |
) |
|
$ |
(265,964 |
) |
Denominator: |
|
|
|
|
|
|
|
|
|
|||
Weighted-average common shares outstanding, basic and diluted |
|
|
174,264 |
|
|
|
119,849 |
|
|
|
63,306 |
|
Net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(1.41 |
) |
|
$ |
(6.23 |
) |
|
$ |
(4.20 |
) |
The following outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share for each period, as the impact of including them would have been anti-dilutive. As disclosed in Note 9, the Company issued a warrant for $100 million in shares of the Company’s Class A common stock. As per the terms of the warrant, potentially dilutive shares are based on the latest equity financing price. The warrant was terminated for no consideration on December 31, 2024.
|
|
As of December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Stock options outstanding |
|
|
— |
|
|
|
— |
|
|
|
210,000 |
|
Convertible preferred stock |
|
|
— |
|
|
|
— |
|
|
|
63,525,953 |
|
AstraZeneca warrant |
|
|
— |
|
|
|
— |
|
|
|
1,744,991 |
|
Mpirik holdback liability |
|
|
— |
|
|
|
— |
|
|
|
8,724 |
|
Deep 6 holdback liability |
|
|
13,614 |
|
|
|
— |
|
|
|
— |
|
SEngine holdback liability |
|
|
— |
|
|
|
— |
|
|
|
41,436 |
|
Allen & Company warrant |
|
|
— |
|
|
|
— |
|
|
|
150,000 |
|
Paige holdback liability |
|
|
70,792 |
|
|
|
— |
|
|
|
— |
|
Unvested RSUs |
|
|
6,285,604 |
|
|
|
6,873,974 |
|
|
|
— |
|
Unvested RSAs |
|
|
17,373 |
|
|
|
— |
|
|
|
— |
|
Unvested PSUs |
|
|
2,569,600 |
|
|
|
— |
|
|
|
— |
|
Shares issuable upon conversion of Notes(1) |
|
|
8,908,350 |
|
|
|
— |
|
|
|
— |
|
Total potentially dilutive shares |
|
|
17,865,333 |
|
|
|
6,873,974 |
|
|
|
65,681,104 |
|
(1) As disclosed in Note 12, the Company entered into the Capped Call in connection with the pricing of the Notes. The Capped Call is generally expected to reduce the potential dilution to the Company’s Class A common stock upon conversion of the Notes. As such, the impact of the Capped Calls was excluded from the calculation as the effect of the Capped Calls if issued upon conversion of the Notes, would have been anti-dilutive.
As disclosed in Note 11, the RSUs issued prior to the IPO include a liquidity event performance condition prior to vesting. As the liquidity event performance condition was satisfied upon completion of the IPO, as of December 31, 2025 and 2024 , these shares are included in potentially dilutive shares.
As disclosed in Note 12, the Second Amended Note may be fully converted to shares upon maturity at the holder’s option, or up to 50% may be converted to shares upon maturity at the Company's option. The number of shares to be issued is based on the amount outstanding at the maturity date, which is subject to reduction based on services used by us prior to the maturity date. As such, these are treated as contingently issuable shares and will be excluded from potential dilutive impact.
As disclosed in Note 10, the Company’s Series G-3 Preferred, Series G-4 Preferred and Series G-5 Preferred contain embedded conversion features resulted in the issuance of additional shares of Class A common stock upon completion of the IPO. The number of shares issued related to these features was dependent upon the IPO price. As such, prior to the IPO, these are treated as contingently issuable shares. Subsequent to the completion of the IPO in June 2024, the additional shares of Class A common stock are included in the weighted-average common shares outstanding.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.