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RECURSION PHARMACEUTICALS, INC. (RXRX)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $5.2M, sharply below prior year and Wall Street consensus, while EPS loss of $0.36 modestly beat estimates; EBITDA loss improved versus consensus due to expense control and milestone timing . Q3 consensus: Revenue $19.36M, EPS $(0.382), EBITDA $(163.4)M; actual: $5.18M, $(0.36), $(151.2)M respectively*.
  • Management reaffirmed non-GAAP cash burn guidance of ≤$450M for 2025 and ≤$390M for 2026, and extended cash runway through YE 2027 with ~$785M cash as of Oct 9, aided by full utilization of the ATM program .
  • Strategic progress: $30M Roche/Genentech microglia phenomap milestone (revenue recognition largely in Q4), REC-617 (CDK7) advanced into combinations; REC-7735 (PI3Kα H1047R) nominated as Development Candidate; additional FAP data (REC-4881) due in December .
  • CEO transition announced: Najat Khan to become CEO effective Jan 1, 2026; Chris Gibson to Chair; messaging emphasized translating platform insights into repeatable clinical proof—potential re-rating catalyst as execution focus intensifies .

What Went Well and What Went Wrong

What Went Well

  • Roche/Genentech collaboration delivered a second whole-genome microglia phenomap, triggering a $30M milestone and bringing cumulative partnership inflows above $500M, underscoring platform value and non-dilutive funding capacity .
  • Clinical pipeline execution: REC-617 achieved 10 mg QD MTD with manageable safety; one confirmed PR and five SD observed; combinations initiated in platinum‑resistant ovarian cancer—aligned with AI-enabled patient selection narrative .
  • Cash runway extended to YE 2027 without additional financing; full ATM utilization reduced financing overhang and allows investors to focus on clinical and partnership catalysts per CFO .

What Went Wrong

  • Revenue miss versus consensus due to milestone timing (microglia $30M achieved in October with partial recognition deferred to Q4), producing a lumpy topline and YoY decline (Q3’24 included a $30M neuronal map milestone) .
  • Elevated R&D and G&A from Exscientia combination and data investments increased net loss YoY (Q3’25 net loss $162.3M vs $95.8M), highlighting ongoing burn ahead of clinical de-risking .
  • Continued reliance on partnership milestones (no revenue guidance provided) and lack of near-term commercial revenue creates estimate volatility and complicates Street modeling; management reiterated focus on non-GAAP cash burn instead .

Financial Results

Revenue, EPS, EBITDA: last three quarters vs estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$14.7 $19.2 $5.2
Revenue Consensus ($USD Millions)$18.08*$15.38*$19.36*
EPS (Primary, $USD)$(0.50) $(0.41) $(0.36)
EPS Consensus ($USD)$(0.516)*$(0.353)*$(0.382)*
EBITDA ($USD Millions)$(172.0)*$(152.4)*$(151.2)*
EBITDA Consensus ($USD Millions)$(247.0)*$(122.6)*$(163.4)*
  • Q3 highlights: Revenue missed consensus (bold miss), EPS beat consensus (bold beat), EBITDA beat consensus (bold beat).
  • Significant beats/misses: Revenue miss vs consensus in Q3 (actual $5.2M vs $19.36M); EPS beat (actual $(0.36) vs $(0.382)); EBITDA beat (actual $(151.2)M vs $(163.4)M)*.

Note: Values with * retrieved from S&P Global.

YoY and QoQ snapshots

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$26.1 $5.2
Net Loss ($USD Millions)$(95.8) $(162.3)
EPS ($USD)$(0.34) $(0.36)

Revenue breakdown (collaboration vs grants)

ComponentQ1 2025Q2 2025Q3 2025
Operating revenue ($USD Millions)$14.82 $19.10 $4.98
Grant revenue ($USD Millions)$(0.07) $0.12 $0.19
Total revenue ($USD Millions)$14.75 $19.22 $5.18

KPIs and expenses

KPI / ExpenseQ1 2025Q2 2025Q3 2025
Cash, cash equivalents + restricted ($USD Millions)$509 $533.8 $667.1
R&D expense ($USD Millions)$129.6 $128.6 $121.1
G&A expense ($USD Millions)$54.7 $46.7 $41.6
Weighted avg shares (Millions)402.8 417.4 447.0
Net cash used in ops (period disclosure)$(132) Q1 $(208.4) 6M $(325.7) 9M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash burn (non-GAAP)FY 2025≤$450M (May 2025) ≤$450M reaffirmed Maintained
Cash burn (non-GAAP)FY 2026n/a≤$390M reaffirmed New/maintained
Cash runwayThroughMid-2027 (May) / into Q4 2027 (Aug) Through YE 2027 (Nov) Raised (extended)
Partnership inflowsBy YE 2026>$100M target (Aug) On track, reaffirmed Maintained
Revenue guidanceFY 2025NoneNone; revenue “lumpy” due to milestone timing Maintained posture

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI platform advances (Boltz‑2, scientific agents)OS 2.0 integration; Boltz‑2 open-source model with MIT/NVIDIA (Q2) Emphasis on “scientific agents”, automated ADMET; ClinTech stack expansion Strengthening, broader scope
Partnerships (Roche/Sanofi)Sanofi 4th milestone ($7M); Roche neuronal map milestone (Q2) Roche/Genentech $30M microglia milestone; cumulative inflows >$500M Positive momentum
Financing/cash runwayCash runway mid‑2027 (Q1); into Q4 2027 (Q2) YE 2027 runway; ATM fully utilized to remove financing overhang Extended runway; de-risked financing
Clinical execution (REC‑617, REC‑4881)CDK7 combos planned; FAP preliminary data (Q1/Q2) CDK7 MTD, combos initiated; FAP data update in Dec Advancing to combination/updates
Leadership/tonePortfolio sharpening post Exscientia (Q1) CEO transition to Najat Khan; focus on clinical proof, capital discipline Execution-focused leadership

Management Commentary

  • “We’ve achieved over $500 million in upfront and milestone payments… With a strong cash runway through the end of 2027, we look forward to delivering on our pipeline” — Chris Gibson (CEO) .
  • “My focus … translating these platform insights into repeatable clinical proof … building a company that delivers sustainable value” — Najat Khan (incoming CEO) .
  • CFO on revenue lumpiness: “We do not give guidance on revenue… timing of our milestones can impact how we recognize some of that revenue… microglia map milestone… recognized partially in the fourth quarter” — Ben Taylor .

Q&A Highlights

  • Financing strategy and runway: ATM fully utilized; runway through YE 2027 without additional financing to refocus investor attention on fundamentals .
  • Platform utilization across generations: Newer assets leverage full stack; older programs still benefit from ClinTech components; iterative learning emphasized .
  • Partnerships: Deep, curated set; active exploration of new partners, but “choiceful” to ensure win‑win value .
  • AI landscape: Management welcomed large‑cap entry (e.g., Lilly/NVIDIA), framing TechBio as the future of biopharma; Recursion positioned to lead .
  • CEO priorities: Data-driven go/no-go, invest where Recursion has edge, capital stewardship .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: Revenue miss (actual $5.18M vs $19.36M*), EPS beat (actual $(0.36) vs $(0.382)), EBITDA beat (actual $(151.2)M vs $(163.4)M*). Prior quarters show similar lumpiness tied to milestone timing .
  • Implications: Street revenue models likely to be revised lower near-term given milestone recognition shifted to Q4; EPS/EBITDA may modestly improve on expense control and mix. Note: Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Expect Q4 revenue uplift from partial recognition of the $30M Roche microglia milestone; near-term trading may hinge on December FAP (REC‑4881) data and ongoing CDK7 combination enrollment updates .
  • Cash runway to YE 2027 and ATM completion reduce financing overhang; non-GAAP burn guidance maintained—watch execution on the ≤$450M/≤$390M targets as a credibility metric .
  • Partnership flywheel is working; >$500M cumulative inflows validate platform; 2026 target of >$100M milestones provides non-dilutive optionality .
  • Clinical catalysts: REC‑4881 (FAP) December update (potential path to pivotal discussion), REC‑617 combination data in 2027; REC‑7735/REC‑102 Phase 1 initiations targeted for 2H26 pending GLP tox—medium-term value drivers .
  • Leadership transition to Najat Khan may sharpen execution and clinical proof orientation—monitor capital discipline and program go/no-go cadence .
  • Given revenue lumpiness and lack of revenue guidance, anchor valuation on cash, partnerships, and clinical milestones rather than quarterly sales; positioning is levered to AI-enabled discovery and partner optionality .
  • Tactical: Potential catalyst-driven trading around December FAP update and Q4 recognition of the Roche milestone; strategic: thesis depends on translating OS insights into repeatable clinical wins and sustained partner economics .
Note: S&P Global consensus and actuals marked with * were retrieved from S&P Global.