Recursion Pharmaceuticals Reports 33% Revenue Jump in Q2 2025, Highlighting AI-Driven Drug Discovery Progress

Recursion (RXRX) Q2 Revenue Jumps 33%

Recursion Pharmaceuticals (RXRX -4.74%), a technology-driven biotech company decoding biology using artificial intelligence for drug discovery, released its financial results for the second quarter of 2025 on August 5, 2025. The headline was a notable revenue beat, with GAAP revenue reaching $19.2 million against analyst expectations of $15.37 million, helped by collaboration milestones. However, research and development expenses surged, leading to a larger net loss of $171.9 million (GAAP). Earnings per share (EPS, GAAP) came in at ($0.41), slightly worse than the prior-year period and matching the ($0.35) consensus. Cash reserves were $533.8 million. Overall, the period showcased advances in revenue generation and technology partnerships, but also underscored elevated spending and the ongoing challenge of moving early-stage drug programs toward commercialization. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Company Overview and Focus Areas Recursion Pharmaceuticals is known for its Recursion Operating System (Recursion OS), a full-stack platform that uses artificial intelligence (AI), automation, and massive biological datasets to accelerate drug discovery. The company focuses on integrating advanced data analytics and technology to identify and develop new medicine candidates more efficiently. Its recent business strategy centers on partnerships with major pharmaceutical firms, the expansion and advancement of a diverse drug pipeline in oncology and rare diseases, and targeted investments in AI and clinical technology. Key success factors remain the ability to generate and validate new drug candidates rapidly, secure milestones from high-profile collaborations, and manage cash and operating expenses in line with its ambitious R&D goals. Quarterly Highlights: Financials, Technology, and Pipeline Progress The biggest financial story was GAAP revenue outpacing expectations by 24.9%, largely due to milestone payments. Collaboration and partnership revenue, including a $7 million milestone from Sanofi, made up the majority of recognized GAAP revenue. This ongoing trend highlights the company's reliance on achieving technical or clinical milestones in partnered drug programs, as opposed to traditional product sales or licensing fees. Operating costs (GAAP) grew sharply. Research and development expense jumped 74.0% year-over-year, influenced by the integration of Exscientia (a drug discovery company acquired in late 2024) and higher platform and collaboration costs, including non-cash expenses related to its work with clinical data partner Tempus. General and administrative spending (GAAP) rose 46.5% year-over-year, reflecting expanded business scale and ongoing integration costs. Net loss (GAAP) grew to $171.9 million, up from $97.5 million a year earlier. The cash position dropped from $603.0 million at December 31, 2024, to $533.8 million as of June 30, 2025, reflecting a high rate of cash use. Net cash used in operating activities was $208.4 million for the first half of 2025, compared to $184.5 million a year earlier. Management projects the current cash runway will stretch into the fourth quarter of 2027, assuming operating plans hold steady and partnership funding continues at a similar pace. From a technology perspective, Recursion continued the rollout of Recursion OS 2.0, a platform upgrade integrating Exscientia's AI-driven chemistry capabilities and large-scale multimodal clinical datasets from partners including Tempus, HealthVerity, and Helix. The release and rapid adoption of the Boltz-2 open-source molecular modeling tool, which has exceeded 40,000 unique users to date, demonstrated the company's expanding influence in computational drug discovery. Strategic partnerships remained central to the company's revenue and pipeline. Its collaboration with Sanofi produced the fourth milestone payment in 18 months, bringing the total received from Sanofi to $130 million as of Q2 2025. Partnerships with Roche and Genentech focused on generating large biological datasets and advancing neurology and cancer programs. Relationships with Bayer and Merck KGaA contributed to early-stage oncology projects. Management estimates that partnership milestones due by the end of 2026 could surpass $100 million, though the timing remains uncertain and lumpy. Pipeline activity featured dose escalation and initial efficacy results for clinical-stage assets such as REC-617 (a CDK7 inhibitor for ovarian and other cancers) and REC-1245 (an RBM39 degrader for solid tumors). The company also advanced REC-4881 (a MEK1/2 inhibitor for familial adenomatous polyposis), which is showing early signs of activity, as well as REC-102 (an ENPP1 inhibitor for the rare disease hypophosphatasia), with plans for Phase 1 initiation in 2H26. Several earlier programs were strategically deprioritized or paused based on data reviews and commercial considerations, highlighting a shift to focus on assets with the strongest differentiation and highest value proposition. Notably, Recursion's business model remains tied to earning milestone-based revenue from its collaboration partners. These milestone payments are variable and depend on meeting predefined technical or clinical goals within each partnership. There is no recurring product revenue at this stage. As a result, future revenue is unpredictable, and delays or failures in partner programs could impact the company's projected cash runway. Looking Ahead: Outlook and Investor Considerations Management stated that current cash reserves are expected to support operations into the fourth quarter of 2027, with full-year 2025 cash burn forecast at or below $450 million, excluding partnering or financing inflows. No detailed revenue or earnings guidance was provided for the remainder of the year. Recursion continues to expect partnership milestones to be a key revenue contributor, but did not offer a timeline for commercial launches of proprietary drugs. Looking forward, investors will track the cadence of partnership milestones, the progress of the pipeline into later clinical phases, and efforts to control operational spending. The growing cash burn, offset by milestone payments, will be a focal point in the coming quarters. The company's full pivot to a milestone- and collaboration-driven model, along with the increasing role of AI in clinical development, presents both new opportunities and ongoing risks. RXRX does not currently pay a dividend. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Recursion Pharmaceuticals : Press Release (recursion reports second quarter 2025 financial results and)

SALT LAKE CITY, Aug. 05, 2025 (GLOBE NEWSWIRE) -- Recursion (Nasdaq: RXRX) a leading clinical stage TechBio company decoding biology to radically improve lives, today reported business updates and financial results for its second quarter ended June 30, 2025. Recursion will host a (L)earnings Call on August 5, 2025 at 8:00 am ET / 6:00 am MT / 1:00 pm BST from Recursion's X (formerly Twitter), LinkedIn, and YouTube accounts giving analysts, investors, and the public the opportunity to ask questions of the company by submitting questions here: https://forms.gle/tZx2fkcmm7BDk9cJ8. "The power of our platform not only allows us to discover and develop potential new medicines, but also gives us insights on patient populations to target that would be challenging using traditional methods," said Chris Gibson, Co-Founder and CEO of Recursion. "In discovery, we're deploying advanced models like Boltz-2 to rapidly design ligands for high-value targets. State of the art platform capabilities helped us drive our fourth partnered discovery milestone with Sanofi this quarter, reflecting tangible momentum across our joint pipeline. We are leveraging these and other improvements to the Recursion OS to not only accelerate and improve our funnel of new programs, but also execution of later stage programs in our pipeline like RBM39 and CDK7." Summary of Business Highlights "REC-1245, our potential first-in-class RBM39 degrader, was identified using phenomap-derived insight, and mimics CDK12 loss to induce replication stress and suppress DDR pathways without CDK12 related toxicities. Early data show strong activity in tumors characterized by replication stress and DNA repair vulnerabilities. Our DAHLIA trial is now enrolling select tumor types to identify responsive populations. For REC-617, our CDK7 inhibitor, we leveraged multi-omic and real world patient data and causal AI modeling to select platinum-resistant ovarian cancer as the first combination cohort," said Najat Khan, PhD, Chief R&D Officer and Chief Commercial Officer of Recursion. target validation programs are advancing leveraging the Recursion OS and Genentech's biological expertise. combination with Recursion closed in November 2024. This was partially offset by cash inflows from partnerships and operational tax rebates totaling $7.0 million and $28.6 million respectively for the first three and six months of 2025. No cash inflows from partnerships or operational tax rebates were recorded during the six months ended June 30, 2024. In association with the restructuring activities announced in June 2025, the Company expects to incur costs totalling $9.3 million, of which $3.9 million has been paid in the second quarter of 2025. Recursion expects to incur all of these expenses in the year ending December 31, 2025. Recursion (NASDAQ: RXRX) is a clinical stage TechBio company leading the space by decoding biology to radically improve lives. Enabling its mission is the Recursion OS, a platform built across diverse technologies that continuously generate one of the world's largest proprietary biological and chemical datasets. Recursion leverages sophisticated machine-learning algorithms to distill from its dataset a collection of trillions of searchable relationships across biology and chemistry unconstrained by human bias. By commanding massive experimental scale - up to millions of wet lab experiments weekly - and massive computational scale - owning and operating one of the most powerful supercomputers in the world, Recursion is uniting technology, biology and chemistry to advance the future of medicine. Recursion is headquartered in Salt Lake City, where it is a founding member of BioHive, the Utah life sciences industry collective. Recursion also has offices in Montréal, New York, London, and the Oxford area. Learn more at https://www.Recursion.com, or connect on X (formerly Twitter) and LinkedIn. This document contains information that includes or is based upon "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, including, without limitation, those regarding Recursion's ability to discover and develop medicines and the occurrence or realization of near-term milestones; the timing of data readouts and other milestones; the impact of preclinical data on trial outcomes; Recursion's future as a leader in TechBio and ability to deliver better treatments to patients faster; the completion of core integration plans and the results of the business combination with Exscientia; expectations relating to early and late stage discovery, preclinical, and clinical programs, including timelines for commencement of and enrollment in studies, data readouts, and progression toward IND-enabling studies; expectations and developments with respect to licenses and collaborations, including option exercises by partners and the amount and timing of potential milestone payments, and the acceleration of progress across multiple partnered programs; prospective products and their potential future indications and market opportunities; developments with Recursion OS, including the ability to discover and develop new medicines and provide insights into patient populations; financial position and cash runway; and other technologies; business and financial plans and performance; and all other statements that are not historical facts. Forward-looking statements may or may not include identifying words such as "plan," "will," "expect," "anticipate," "intend," "believe," "potential," "continue," and similar terms. These statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements, including but not limited to: challenges inherent in pharmaceutical research and development, including the timing and results of preclinical and clinical programs, where the risk of failure is high and failure can occur at any stage prior to or after regulatory approval due to lack of sufficient efficacy, safety considerations, or other factors; our ability to leverage and enhance our drug discovery platform; our ability to obtain financing for development activities and other corporate purposes; the success of our collaboration activities; our ability to obtain regulatory approval of, and ultimately commercialize, drug candidates; our ability to obtain, maintain, and enforce intellectual property protections; cyberattacks or other disruptions to our technology systems; our ability to attract, motivate, and retain key employees and manage our growth; inflation and other macroeconomic issues; and other risks and uncertainties such as those described under the heading "Risk Factors" in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. All forward-looking statements are based on management's current estimates, projections, and assumptions, and Recursion undertakes no obligation to correct or update any such statements, whether as a result of new information, future developments, or otherwise, except to the extent required by applicable law. Photos accompanying this announcement are available at https://www.globenewswire.com/NewsRoom/AttachmentNg/5f177435-1e39-422b-a35b-582abb38a535 https://www.globenewswire.com/NewsRoom/AttachmentNg/36c0f8b5-9b3c-4d4f-9101-384a9a91fde1