Recursion Q2 2026 earnings: Expense cuts narrow the net loss

Recursion (NASDAQ: RXRX) reported Q2 2026 revenue of $7.7 million, down from $19.2 million a year earlier, while GAAP diluted loss per share improved to $0.25 from $0.41. Lower research and development and administrative expenses narrowed the net loss, although quarterly operating cash use increased. Genentech’s decision to advance the collaboration’s first neuroscience target and the reduction in Recursion’s 2026 cash expense guidance were the quarter’s main forward-looking developments.

Core financial results

Revenue fell approximately 60% because Recursion recognized less revenue from Roche and Genentech following the completion of certain project phases in the prior-year period. Cost of revenue was $11.5 million, exceeding reported revenue, but lower operating expenses more than offset the revenue decline at the operating-loss level.

R&D expense decreased by approximately 30%, primarily because Tempus-related non-cash data expenses fell to $3.1 million from $22.7 million and operating efficiency improved. G&A expense declined by approximately 11%, largely due to a $4.9 million reduction in salaries following headcount reductions. The weighted-average share count increased by about 28%, so the per-share loss improved more than the total net loss.

Collaboration and pipeline execution

Genentech exercised the first Validated Target Option under its neuroscience collaboration with Recursion, moving a previously unexplored target into a joint small-molecule early discovery program. This represents an early platform-validation milestone rather than clinical validation, and the release did not identify a specific payment associated with the option exercise. Recursion has received $216 million in cumulative upfront and milestone payments from the Roche and Genentech collaboration.

The company and Sanofi are also advancing programs in immunology and inflammation and oncology. Recursion has received $134 million in cumulative upfront and milestone payments from that collaboration, with potential development-candidate and late-stage discovery milestones expected over the next six to 12 months. Future milestone amounts remain conditional on program progress and partner decisions.

Within the internal pipeline, the most immediate events involve REC-4881, REC-7735 and REC-1245.

REC-7735 was designed to provide more than 100-fold selectivity for the H1047R mutant over wild-type PI3Kα. That selectivity remains a development premise to be evaluated clinically rather than an established therapeutic benefit.

Lower expenses narrowed losses, but working capital lifted cash use

The reduction in R&D and G&A spending helped narrow the quarterly net loss by approximately 24%. Operating cash use nevertheless increased to $105.9 million because of working-capital movements and a difficult comparison: Q2 2025 included a $28.6 million cash inflow from a UK R&D tax credit.

Cash, cash equivalents and restricted cash totaled $556.8 million on June 30, 2026, down from $753.9 million at the end of 2025. On a year-to-date basis, Recursion’s non-GAAP cash operating expense declined to $191.0 million from $199.1 million. This measure excludes partnership inflows and, in the prior-year period, transaction costs.

Management maintained its expectation that existing cash will fund operations into early 2028 under the current operating plan and without additional financing. That estimate depends on future clinical spending, partnership inflows and continued expense control.

2026 expense guidance

Recursion lowered the ceiling for its full-year 2026 cash operating expense guidance by $15 million, citing additional operating efficiencies. The change is consistent with the year-over-year reductions in R&D and administrative spending.

Cash operating expense is a company-defined non-GAAP liquidity measure that excludes partnership inflows and non-ordinary transaction costs.

Recent insider transactions

The six-month insider dataset reports 3,767,083 shares purchased across 26 transactions and 921,617 shares sold across 20 transactions, producing reported net purchases of 2,845,466 shares. The latest 10 individual records consisted of eight zero-price stock awards and two direct sales; the sales are detailed below.

The reported transactions do not, by themselves, establish insiders’ views about Recursion’s prospects.

Risks investors should monitor

• Collaboration revenue can be uneven. The Q2 revenue decline resulted from the timing and completion of Roche and Genentech project phases. Future options and milestone payments depend partly on partner decisions and program progress.
• Cash consumption remains substantial. Quarterly operating cash use increased even as the accounting loss narrowed, and cash including restricted cash declined by $197.1 million during the first half. The early-2028 runway estimate is based on the current operating plan.
• Key programs remain clinically or regulatorily unproven. Recursion still needs clarity on the registrational path for REC-4881, while REC-7735 had not begun its first clinical trial as of quarter-end.
• Upcoming milestones depend on execution. Planned trial starts, data presentations and partner development-candidate decisions may not occur on the expected timelines or produce favorable results.

Summary

Recursion’s Q2 2026 results showed lower collaboration revenue but improved operating efficiency, with expense reductions narrowing both operating and net losses. Cash use remained elevated because of working-capital effects and a prior-year tax-credit comparison, making continued spending control important. The next operating checkpoints are Genentech’s early discovery work, REC-4881’s additional data and regulatory-path update, the planned REC-7735 trial start, and execution against the reduced 2026 cash expense ceiling.

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