Recursion 2025 Q2 Earnings Deepened Losses Despite Revenue Growth

Recursion (RXRX) reported fiscal 2025 Q2 earnings on August 5, 2025. The company posted a 33.3% year-over-year revenue increase, but losses widened. Management provided no guidance updates and reiterated its cash runway into late 2027.

Revenue
Recursion’s revenue rose significantly in Q2 2025 to $19.22 million, a 33.3% increase from $14.42 million in the same period in 2024. The majority of this revenue came from operating activities, with $19.10 million generated from core operations. A smaller component, amounting to $120,000, was derived from grant funding. Together, these revenue streams totaled $19.22 million, indicating strong performance in business operations despite limited non-operational support.

Earnings/Net Income
Recursion reported a net loss of $171.90 million in Q2 2025, representing a 76.2% year-over-year increase from the prior year’s loss of $97.54 million. On a per-share basis, the loss deepened to $0.41, a 2.5% increase from $0.40 in the previous year. Despite the revenue increase, the company remains unprofitable and has experienced cumulative losses over the last six years, highlighting the challenge of commercializing its technology-driven drug discovery model.

Price Action
RXRX’s stock price has experienced mixed performance in the short term, dropping 6.82% in the latest trading day and 7.06% in the most recent full trading week. However, it has managed to post a positive return of 4.93% month-to-date, reflecting some investor optimism amid challenging fundamentals.

Post-Earnings Price Action Review
A strategy of buying RXRX after the earnings beat on revenue and holding for 30 days proved highly unsuccessful, returning -90.03% and underperforming the benchmark by 90.03 percentage points. The strategy was marked by extreme volatility (93.43%) and a Sharpe ratio of -0.50, indicating a high-risk, unprofitable trade. The absence of meaningful drawdown and the poor return signal a lack of investor confidence post-earnings.

CEO Commentary
CEO Christopher C. Gibson highlighted the progress in integrating the Exscientia platform into Recursion OS 2.0, aiming to enhance drug discovery capabilities. He emphasized the success of the Boltz-2 project, an open-source collaboration with MIT and Nvidia, which improves protein ligand binding predictions with significantly less compute power. Gibson also underscored the ClinTech platform’s role in accelerating clinical trial efficiency through faster patient recruitment and optimized dose selection. He expressed optimism about the platform’s ability to reduce costs and speed up drug development, citing upcoming program readouts and continued momentum in partnerships with Roche, Sanofi, and others.

Guidance
Recursion maintained its guidance, projecting cash runway through Q4 2027. The company expects cash burn in 2026 to remain below $390 million, supported by more than $100 million in partnership milestones by year-end. Management emphasized the importance of maintaining high-quality programs while advancing internal and partnered programs toward key clinical and preclinical milestones.

Additional News
Recursion, a leading AI-driven biotech, continues to leverage its Recursion OS 2.0 platform to accelerate drug discovery and clinical development. The company recently launched the Boltz-2 open-source model, which has already gained significant traction with nearly 200,000 downloads and 50,000 unique users. Recursion is also expanding its ClinTech platform, which applies causal AI to human genomic data for better trial design and patient recruitment.

On the pipeline front, several internal candidates are progressing toward key data readouts in 2025 and 2026, including REC-617 (CDK7) and REC-245 (RBM39). Collaborations with major pharma partners like Roche, Sanofi, and Bayer remain a core part of the company's strategy, with over $100 million in milestone revenue expected by year-end. Recursion also highlighted its ability to reduce cash burn by 35% in 2026 compared to 2024, reinforcing its strong cash position and operational discipline.

With a cash balance of $533.8 million as of June 30, 2025, and a focus on efficiency and strategic partnerships, Recursion is positioned to continue advancing its AI-powered drug discovery model while managing its financial runway effectively.