10-Q · August 5, 2026
Recursion's Q2 revenue fell 60% year over year to $7.670 million as Roche-related revenue declined following completion of prior project phases, while the net loss improved 24% to $131.005 million through substantial…
Earnings analysis · 10-Q
RXRX earnings analysis
Filed November 2, 2026 · Our reading of the company's report
The latest report
Recursion's Q3 2026 results improved materially year over year: revenue rose to $18.552 million, gross margin turned positive at 45.9%, operating loss narrowed to $123.176 million, and diluted EPS improved to negative…
Read full summary
Recursion's Q3 2026 results improved materially year over year: revenue rose to $18.552 million, gross margin turned positive at 45.9%, operating loss narrowed to $123.176 million, and diluted EPS improved to negative $0.22. The improvement was driven primarily by a $10.0 million Sanofi milestone and lower operating costs, while clinical spending shifted toward REC-4881 and REC-1245 and the pipeline produced encouraging data. However, the company used $264.454 million of operating cash in the first nine months, retains material internal-control weaknesses, and remains dependent on future financing, collaboration milestones, and successful clinical execution.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.22
- Segment
- Single operating segment: revenue $18.552 million; clinical program expense $23.939 million, internal and partnered discovery $32.947 million, platform technology and infrastructure $20.517 million, and general and administrative expense $20.783 million for Q3 2026.
What stood out
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Revenue rebounded on Sanofi milestone
Q3 revenue increased to $18.552 million from $5.175 million in Q3 2025, a $13.377 million or greater-than-100% increase, primarily reflecting a $10.0 million Sanofi milestone. Revenue also rose from $8 million in Q2 2026.
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Gross margin turned positive
Gross margin improved to 45.9% in Q3 2026 from negative 183.8% in Q3 2025 and negative 49.8% in Q2 2026, as cost of revenue declined 32% year over year to $10.045 million.
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Losses narrowed year over year
Operating loss narrowed 28% year over year to $123.176 million from $172.202 million, while operating expenses declined 20% to $141.728 million. Diluted EPS improved to negative $0.22 from negative $0.36 in Q3 2025, but worsened from negative $0.21 in Q4 2025.
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Spending shifted toward lead programs
Research and development expense declined 18% year over year to $99.122 million. Internal and partnered discovery expense fell 75% to $8.672 million, partly offset by higher REC-4881 expense of $5.750 million, up from $2.101 million, and REC-1245 expense of $3.996 million, up from $1.193 million.
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Clinical data strengthened pipeline
REC-4881 produced a 47% median reduction in total polyp burden after 12 weeks, with 13 of 15 patients showing reductions; REC-1245 generated 3 partial responses and a 91.7% disease control rate at doses of 45 mg QD or higher.
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Liquidity extended by equity raise
Cash, cash equivalents and restricted cash totaled $561.530 million at September 30, 2026, and the subsequent October offering added approximately $187.2 million of net proceeds. Management stated that cash and cash equivalents should fund operations for at least the next 12 months.
What to watch
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Large losses and cash burn
The company used $264.454 million of operating cash in the first nine months of 2026 and reported a $367.545 million net loss. Its accumulated deficit reached $2.4 billion, and management stated that additional financing will likely be required.
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Material weaknesses remain
Disclosure controls remained ineffective as of September 30, 2026 because material weaknesses from the 2025 Annual Report had not been remediated. Management had implemented new ERP and purchase-to-pay systems but stated the weaknesses could not be considered remediated until controls operated for a sufficient period and testing was completed.
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Key clinical milestones remain distant
The company expects to initiate the REC-4881 registrational trial only in the second half of 2027, subject to ongoing FDA discussions. REC-1245 expansion data in endometrial cancer are also not expected until the second half of 2027, extending clinical and regulatory execution risk.
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Tempus agreement became less flexible
The September 2026 Tempus amendment eliminated Recursion's right to terminate for convenience, reduced annual license fees to $14.0 million for the third through fifth anniversaries, and decreased the aggregate number of unique records available, potentially limiting data access while increasing contractual commitment.
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Revenue remains milestone dependent
The company has no approved products and stated it does not expect product-sale revenue for at least several years. Q3 operating revenue of $18.055 million was largely collaboration-driven, including the $10.0 million Sanofi milestone, leaving revenue timing dependent on partner milestones and project progress.
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Funding remains equity dependent
Total debt and financing lease liabilities declined to $11.901 million from $18.655 million at December 31, 2025, but cash fell to $561.530 million from $753.921 million despite $85.515 million of nine-month equity proceeds, underscoring continued reliance on capital markets.
Management's outlook
No explicit numeric revenue or EPS guidance was provided. Management expects to initiate a registrational REC-4881 trial in the second half of 2027, pending FDA discussions, and believes cash and cash equivalents will fund operations for at least the next 12 months. The October 2026 offering generated approximately $187.2 million of net proceeds.
Earlier filings 2
10-Q · May 6, 2026
Recursion Pharmaceuticals (RXRX) reported Q1 2026 results with total revenue of $6.5 million, significantly below the estimated $15.9 million, but the net loss of $117.5 million marked a 42% improvement compared to the…
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