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RECURSION PHARMACEUTICALS, INC. (RXRX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $4.546M, down 58% year over year (Q4 2023: $10.891M) due to timing of Roche/Genentech projects; net loss widened to $(178.9)M and diluted EPS was $(0.53) .
  • FY pro forma revenue (as if Exscientia had been combined since 1/1/2023) was $82.6M; CFO rounded to ~$83M on the call; cash, cash equivalents and restricted cash reached $603.0M with runway expected into 2027 .
  • Operating cash outflow was $115.4M in Q4 (vs. $74.1M in Q4 2023); R&D was $98.3M and G&A was $77.2M, reflecting platform expansion and transaction costs tied to Exscientia integration .
  • Strategic/catalyst updates: monotherapy PR in REC-617 (CDK7) Phase 1/2; first patient dosed in REC-1245 (RBM39) Phase 1/2; partner milestones of $45M (Roche $30M; Sanofi $15M); and maintained synergy guidance of at least $100M with majority of run-rate realized in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Pipeline execution: REC-617 showed a confirmed durable partial response in platinum-resistant ovarian cancer and multiple stable disease responses in Phase 1/2; company plans to initiate combinations in 1H25 .
  • Partner monetization: Delivered milestones for Roche/Genentech (first neuroscience phenomap; $30M option exercised) and two Sanofi milestones ($15M), aggregating $45M in cash inflows .
  • Integration momentum and platform scale: Maintained guidance of ≥$100M synergies, carved out Vienna operations (Alpha Biotechnology) to focus spend, and highlighted BioHive-2 and new foundation models (Phenom-2, MolPhenix, MolGPS) .

Management quotes:

  • “In 2024, Recursion made a transformative leap with the largest TechBio merger in history… accelerating the Recursion OS as the leading full-stack TechBio platform.” — CEO Chris Gibson .
  • “We had $83 million in revenue as a combined group… and an ending cash balance of over $600 million. That gives us runway to extend into 2027.” — CFO Ben Taylor .

What Went Wrong

  • Revenue cadence: Q4 revenue fell to $4.546M (vs. $10.891M in Q4 2023) driven by timing in Roche/Genentech collaboration work; CFO reiterated quarter-to-quarter revenue is not a meaningful guide due to partnership accounting .
  • Cost intensity: R&D rose to $98.3M (Q4 2023: $69.5M) and G&A to $77.2M (Q4 2023: $30.5M), including Exscientia-related transaction costs, expanded platform investments, and personnel .
  • Cash burn: Net cash used in operating activities increased to $115.4M in Q4 (Q4 2023: $74.1M); management flagged deeper disclosure in May and indicated focus on managing cash burn below ~$550M combined burn figures in 2024 context (not perfect, directional) .

Financial Results

Sequential performance (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$14.417 $26.082 $4.546
Net Loss ($USD Millions)$(97.540) $(95.842) $(178.905)
Diluted EPS ($USD)$(0.40) $(0.34) $(0.53)
R&D Expense ($USD Millions)$73.928 $74.600 $98.333
G&A Expense ($USD Millions)$31.833 $37.757 $77.186
Net Cash from Operating Activities ($USD Millions)$(82.2) $(59.2) $(115.4)

Year-over-year snapshot (Q4 2023 → Q4 2024)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$10.891 $4.546
Net Loss ($USD Millions)$(92.996) $(178.905)
Diluted EPS ($USD)$(0.42) $(0.53)
Cost of Revenue ($USD Millions)$9.881 $12.794
R&D Expense ($USD Millions)$69.482 $98.333
G&A Expense ($USD Millions)$30.458 $77.186
Net Cash from Operating Activities ($USD Millions)$(74.1) $(115.4)

Revenue composition (segment-like breakdown)

Revenue Component ($USD Millions)Q4 2023Q4 2024
Operating Revenue$10.624 $4.511
Grant Revenue$0.267 $0.035
Total Revenue$10.891 $4.546

KPIs and balance items (Q4 context)

KPIQ4 2024
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$603.0
Weighted-Average Shares (Basic & Diluted)336,035,980
Unearned Revenue – Current ($USD Millions)$61.767
Unearned Revenue – Non-current ($USD Millions)$118.765
Total Stockholders’ Equity ($USD Millions)$1,034.782
Partner Milestones Cash Inflows (FY 2024)$45M (Roche $30M; Sanofi $15M)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Synergy SavingsRun-rate (majority in 2025)~$100M annual synergies (Aug 2024) Maintain ≥$100M; majority of run-rate achieved in 2025 Maintained; timeline affirmed
Cash RunwayThrough 2027Runway into 2027 (Aug 2024) Expected cash runway into 2027 Maintained
Footprint Optimization2025N/ASub-lease/simplify legacy sites post-combination New operational update
Austria Operations2025N/ACarved out into Alpha Biotechnology GmbH (49% ownership) New structural update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
AI/Compute/FMsLaunched BioHive-2; transcriptomics map; growing multimodal data Emphasis on BioHive-2; Causal AI + ClinTech; foundation models Phenom-2, MolPhenix, MolGPS; atomistic (QM/MD) focus Strengthening
PartnershipsRoche phenomap optioned ($30M); Bayer data packages; Sanofi progress $45M milestones cash inflows (Roche $30M; Sanofi $15M); ongoing target validation Continuing, monetizing
Revenue CadenceGuidance that revenue recognition is uneven across milestones CFO reiterated quarterly revenue is not a guide; variability from milestone recognition Ongoing variability
Pipeline ExecutionREC-4881 trials; REC-3964 Ph2 start; IND/CTA updates (LSD1, MALT1, fibrosis) REC-617 monotherapy PR; REC-1245 first patient dosed; multiple 2025 catalysts Advancing
Cash/Runway & SynergiesRunway into 2027; ~$100M synergies expected Runway into 2027; ≥$100M synergies maintained; majority run-rate in 2025 Maintained/near-term realization
Corporate StructureProposed Exscientia combination Combination closed; Vienna carve-out (Alpha), real estate simplification Integration and focus

Management Commentary

  • Strategic positioning: “With a portfolio of 10 clinical and preclinical programs… we are driving towards faster and more effective drug development.” — CEO Chris Gibson .
  • Revenue model and cadence: “We are often… paid an upfront payment that then is recognized as revenue over a longer period of time… hard to track quarter-to-quarter performance based on revenue.” — CFO Ben Taylor .
  • Cash/burn and disclosures: “We will be able to manage our cash burn and be underneath those numbers this year… more detailed update in May.” — CFO Ben Taylor .
  • Platform ambition: shift toward “virtual cell” with broad data layers; moving from large-scale data generation to validating simulations over time — CEO Chris Gibson .

Q&A Highlights

  • Compute scale, NVIDIA partnership, and moat: management emphasized complexity of biology and continued need for scale; BioHive-2 supports both GPU and CPU workloads including atomistic modeling .
  • Revenue drop clarification: Q4 YoY decline reflects milestone timing; partnership accounting creates uneven quarterly revenue; not a subscription-like cadence .
  • Cash burn visibility: combined cash burn directional context provided; deeper details to come in May; focus on controlling burn below prior combined figures .
  • REC-994 efficacy signals: management pushed back on “negative” efficacy interpretation, citing signal-finding design, trends in MRI lesion volume (not powered) and mRS functional measures; LTE study ongoing with FDA interactions expected .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and Revenue was unavailable via S&P Global at the time of this analysis due to request limits. As a result, comparison vs consensus cannot be provided and should be revisited when access resumes.
  • Given the significant Q4 revenue decline driven by collaboration timing and elevated OpEx, we would expect near-term estimate adjustments to reflect lower recognized revenue cadence and higher integration costs until synergies begin to flow through more visibly .

Key Takeaways for Investors

  • Revenue variability is structural to the partnership model; avoid over-weighting quarterly revenue; monitor milestone delivery pace (Roche/Genentech phenomaps, Sanofi programs) .
  • Pipeline catalysts are tightening the narrative: REC-617 combo initiation (1H25), further Phase 1 data (2H25); REC-1245 dose-escalation updates (1H26); REC-4881 Phase 1b/2 safety/early efficacy (1H25); REC-3964 Phase 2 update (1Q26) .
  • Watch the May 2025 update for detailed cash burn/operational synergies; management reiterated ≥$100M synergies with majority of run-rate realized in 2025 and focus on footprint simplification .
  • Cash runway into 2027 underpins medium-term execution capacity; liquidity supports continued platform and clinical investments despite elevated near-term OpEx .
  • The “virtual cell” ambition is a longer-term differentiator; evidence will be reduced experimental scale and more validation of simulated outputs — monitor disclosures on model performance and data generation cadence .
  • Near-term trading implications: stock likely more sensitive to clinical readouts (REC-617, REC-4881, REC-2282 PFS6) and partnership milestone announcements; less to quarterly revenue prints given accounting dynamics .
  • Medium-term thesis: platform-plus-clinical portfolio, partner monetization, and synergy realization could improve operating leverage as integration matures and milestones accrue .

Notes: The CFO referenced ~$83M pro forma FY revenue on the call, while the 8‑K specified $82.6M; we anchor to the 8‑K figure when available and note the rounding difference .