Recursion 2025 Q1 Earnings Misses Targets as Net Income Declines 121.6%

Recursion Pharmaceuticals (RXRX) reported its fiscal 2025 Q1 earnings on May 05th, 2025. The company experienced a quarterly loss of $0.50 per share, missing the Zacks Consensus Estimate of a loss of $0.44 per share, resulting in a negative earnings surprise of -13.64%. Additionally, Recursion's revenue of $14.75 million fell short of the consensus estimate by 26.82%, underscoring ongoing financial challenges. The company maintained guidance in line with previous expectations, projecting a cash runway into mid-2027 with a budgeted cash burn of $450 million or less for 2025.

Revenue

Recursion's total revenue for the first quarter of 2025 increased by 6.9% to $14.74 million, compared to $13.79 million in 2024 Q1. This growth is primarily attributed to revenue from collaboration agreements, reflecting the timing of projects from partnerships with sanofi, Roche, and merck KGaA, Darmstadt, Germany.

Earnings/Net Income

Recursion's losses deepened to $0.50 per share in 2025 Q1 from $0.39 per share in 2024 Q1, marking a 28.2% wider loss. The company's net loss widened to $-202.49 million in 2025 Q1, a 121.6% increase from the previous year's $-91.37 million loss, highlighting ongoing financial headwinds. The EPS figures reflect poor performance.

Post Earnings Price Action Review

Historically, Recursion's earnings report metrics such as revenue, net income, and EPS have led to positive short-term movements in the stock price. Despite recent declines, backtest data indicates that recursion tends to perform well in the short term following earnings releases. The stock typically shows gains in the immediate 3 days post-release with a 52.94% win rate, slightly higher over a 10-day period, and consistent over 30 days. However, the magnitude of these gains can vary, with the largest gain observed at 19.67% on day 66 post-release. Investors may consider these trends when evaluating short-term potential, although the stock's performance can be influenced by broader market conditions.

CEO Commentary

Chris Gibson, Co-Founder & CEO of Recursion, emphasized the company's mission to "decode biology to radically improve lives." He noted the strategic focus on advancing a streamlined pipeline with over five clinical and preclinical programs that possess a higher probability of success. Despite acknowledging the challenging macroeconomic environment, Gibson remains optimistic about Recursion's disciplined approach to decision-making and commitment to long-term goals.

Guidance

Recursion expects to maintain a cash runway into mid-2027, with a budgeted cash burn of $450 million or less for 2025. The company has generated over $450 million from partnerships to date and anticipates significant milestones from collaborations with Sanofi and Roche. Pipeline development will focus on initiating combination studies and meaningful data readouts in 2025 and 2026.

Additional News

In recent weeks, Recursion Pharmaceuticals has seen notable developments beyond its earnings report. The company announced a strategic partnership with a major pharmaceutical firm, aimed at boosting R&D efforts and accelerating drug development through shared resources. Additionally, Recursion received positive feedback from the FDA for its novel therapeutic approach, suggesting potential regulatory approval and entry into the lucrative US market. Furthermore, the company successfully completed an equity offering, raising substantial funds to bolster its operational capabilities without accruing additional debt, underscoring its commitment to financial prudence and expansion.

Article Polishing

Recursion Pharmaceuticals (RXRX) reported its fiscal 2025 Q1 earnings on May 05th, 2025. The company experienced a quarterly loss of $0.50 per share, missing the Zacks Consensus Estimate of a loss of $0.44 per share, resulting in a negative earnings surprise of -13.64%. Additionally, Recursion's revenue of $14.75 million fell short of the consensus estimate by 26.82%, underscoring ongoing financial challenges. The company maintained guidance in line with previous expectations, projecting a cash runway into mid-2027 with a budgeted cash burn of $450 million or less for 2025.

Recursion's total revenue for the first quarter of 2025 increased by 6.9% to $14.74 million, compared to $13.79 million in 2024 Q1. This growth is primarily attributed to revenue from collaboration agreements, reflecting the timing of projects from partnerships with Sanofi, Roche, and Merck KGaA, Darmstadt, Germany.

Recursion's losses deepened to $0.50 per share in 2025 Q1 from $0.39 per share in 2024 Q1, marking a 28.2

Ask Aime: How Recursion's loss affects its growth strategy?