RECURSION PHARMACEUTICALS, INC. 10-K

Item 8. Financial Statements and Supplementary Data. 154 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Recursion Pharmaceuticals, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Recursion Pharmaceuticals, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date as the Company (i) did not design and maintain effective processes and controls at the Exscientia business, including with respect to consistent review procedures within its financial statement close process, to appropriately analyze, record and disclose accounting matters timely and accurately while maintaining appropriate segregation of duties and (ii) did not design and maintain effective information technology general controls at the Exscientia business for information systems that are significant to the preparation of its financial statements, including controls to verify that conflicting duties were appropriately segregated within such systems, in addition to controls over change management and program development. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management's report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an 155 Table of Contents understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates External Research and Development Expenses As described in Note 2 to the consolidated financial statements, research and development expenses comprise of costs incurred in performing research and development activities (other than those performed pursuant to contracts with customers, which are recorded as revenue), including drug discovery and development studies, external research and the purchase of laboratory supplies. The Company recognizes expenses associated with its third-party contracted services based on the completion of activities as specified in the applicable contracts. The Company’s research and development expenses for the year ended December 31, 2025 were $475.3 million, a portion of which relates to external research and development expenses. The principal consideration for our determination that performing procedures relating to external research and development expenses is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s external research and development expenses. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s research and development expenses, including controls over external research and development expenses. These procedures also included, among others (i) testing external research and development expenses on a sample basis by obtaining and inspecting source documents, such as the underlying agreements with external vendors, purchase orders, invoices received, and information from third-party service providers and (ii) testing the allocation and classification of external research and development expenses. 156 Table of Contents /s/ PricewaterhouseCoopers LLP Seattle, Washington February 25, 2026 We have served as the Company’s auditor since 2024. 157 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Recursion Pharmaceuticals, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows of Recursion Pharmaceuticals, Inc. for December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We served as the Company’s auditor from 2017 to 2024. Salt Lake City, Utah February 29, 2024 except for Note 15, as to which the date is February 28, 2025 158 Table of Contents Recursion Pharmaceuticals, Inc. Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 743,294 $ 594,350 Restricted cash 4,594 3,045 Other receivables 24,649 49,166 Prepaid data assets 11,742 29,601 Other current assets 28,566 38,107 Total current assets 812,845 714,269 Restricted cash, non-current 6,033 5,629 Property and equipment, net 103,931 141,063 Operating lease right-of-use assets 45,339 65,877 Financing lease right-of-use assets 20,210 26,273 Intangible assets, net 309,903 335,855 Goodwill 162,158 148,873 Deferred tax assets 957 1,934 Other assets, non-current 12,754 8,825 Total assets $ 1,474,130 $ 1,448,598 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 18,118 $ 21,613 Accrued expenses and other liabilities 70,230 81,872 Unearned revenue 37,605 61,767 Operating lease liabilities 12,663 13,795 Notes payable and financing lease liabilities 9,091 8,425 Total current liabilities 147,707 187,472 Unearned revenue, non-current 114,012 118,765 Operating lease liabilities, non-current 46,647 67,250 Notes payable and financing lease liabilities, non-current 9,564 19,022 Deferred tax liabilities 23,255 16,575 Other liabilities, non-current 2,080 4,732 Total liabilities 343,265 413,816 Commitments and contingencies (Note 7) Stockholders’ equity Common stock, $ 0.00001 par value; 2,000,000,000 shares (Class A 1,989,032,117 and Class B 10,967,883 ) authorized as of December 31, 2025 and December 31, 2024; 528,182,693 shares (Class A 521,831,046 , Class B 5,547,334 and Exchangeable 804,313 ) and 396,802,394 (Class A 389,547,223 and Class B 6,958,575 and Exchangeable 296,596 ) issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 5 4 Additional paid-in capital 3,170,145 2,473,698 Accumulated deficit ( 2,076,002 ) ( 1,431,283 ) Accumulated other comprehensive income (loss) 36,717 ( 7,637 ) Total stockholders’ equity 1,130,865 1,034,782 Total liabilities and stockholders’ equity $ 1,474,130 $ 1,448,598 See the accompanying notes to these consolidated financial statements. 159 Table of Contents Recursion Pharmaceuticals, Inc. Consolidated Statements of Operations (in thousands, except share and per share amounts) Years ended December 31, 2025 2024 2023 Revenue Operating revenue $ 74,256 $ 58,488 $ 43,876 Grant revenue 425 351 699 Total revenue 74,681 58,839 44,575 Operating costs and expenses Cost of revenue 70,953 45,238 42,587 Research and development 475,271 314,421 241,226 General and administrative 176,589 178,184 110,822 Total operating costs and expenses 722,813 537,843 394,635 Loss from operations ( 648,132 ) ( 479,004 ) ( 350,060 ) Other income, net 3,237 14,216 17,932 Loss before income tax benefit ( 644,895 ) ( 464,788 ) ( 332,128 ) Income tax benefit 136 1,127 4,062 Net loss $ ( 644,759 ) $ ( 463,661 ) $ ( 328,066 ) Per share data Net loss per share of Class A, B and Exchangeable common stock, basic and diluted $ ( 1.44 ) $ ( 1.69 ) $ ( 1.58 ) Weighted-average shares (Class A, B and Exchangeable) outstanding, basic and diluted 447,446,109 274,207,146 207,853,702 See the accompanying notes to these consolidated financial statements. 160 Table of Contents Recursion Pharmaceuticals, Inc. Consolidated Statements of Comprehensive Loss (in thousands) Years ended December 31, 2025 2024 2023 Net loss $ ( 644,759 ) $ ( 463,661 ) $ ( 328,066 ) Other comprehensive income (loss): Currency translation adjustments 44,354 ( 7,637 ) — Other comprehensive income (loss): 44,354 ( 7,637 ) — Comprehensive loss $ ( 600,405 ) $ ( 471,298 ) $ ( 328,066 ) See the accompanying notes to these consolidated financial statements. 161 Table of Contents Recursion Pharmaceuticals, Inc. Consolidated Statements of Stockholders’ Equity (in thousands, except share amounts) Common Stock (Class A, B and Exchangeable) Additional Paid-in-Capital Accumulated Deficit Accumulated other comprehensive income (loss) Stockholders’ Equity Shares Amount Balance as of December 31, 2022 191,022,864 $ 2 $ 1,125,360 $ ( 639,556 ) $ — 485,806 Net loss — — — ( 328,066 ) — ( 328,066 ) Stock option exercises and other 9,058,817 — 12,831 — — 12,831 Stock-based compensation — — 53,503 — — 53,503 Common stock issuance for private placement, net of issuance costs 19,658,963 — 128,093 — — 128,093 Class A shares and stock options issued for acquisitions 11,303,838 — 89,269 — — 89,269 Common stock issued for Tempus agreement 3,225,902 — 22,000 — — 22,000 Balance as of December 31, 2023 234,270,384 2 1,431,056 ( 967,622 ) — 463,436 Net loss — — — ( 463,661 ) — ( 463,661 ) Other comprehensive loss — — — — ( 7,637 ) ( 7,637 ) Stock option exercises and other 11,359,808 — 8,299 — — 8,299 Stock-based compensation — — 81,688 — — 81,688 Common stock sales issuances, net of issuance costs 45,535,390 1 300,532 — — 300,533 Class A shares and stock options issued for acquisitions 102,138,419 1 630,123 — — 630,124 Common stock issued for Tempus agreement 3,498,393 — 22,000 — — 22,000 Balance as of December 31, 2024 396,802,394 4 2,473,698 ( 1,431,283 ) ( 7,637 ) 1,034,782 Net loss — — — ( 644,759 ) — ( 644,759 ) Other comprehensive income — — — — 44,354 44,354 Stock option exercises and other 15,637,988 — 4,046 40 — 4,086 Stock-based compensation — — 111,223 — — 111,223 Common stock sales issuances, net of issuance costs 104,798,594 1 528,863 — — 528,864 Class A shares issued for asset acquisition 3,854,975 — 20,315 — — 20,315 Common stock issued for Tempus agreement 7,088,742 — 32,000 — — 32,000 Balance as of December 31, 2025 528,182,693 $ 5 $ 3,170,145 $ ( 2,076,002 ) $ 36,717 $ 1,130,865 See the accompanying notes to these consolidated financial statements. 162 Table of Contents Recursion Pharmaceuticals, Inc. Consolidated Statements of Cash Flows (in thousands) Years ended December 31, 2025 2024 2023 Cash flows from operating activities Net loss $ ( 644,759 ) $ ( 463,661 ) $ ( 328,066 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 83,701 36,494 24,402 Stock-based compensation 111,223 81,688 53,503 Asset impairment 5,956 108 1,188 Lease expense 22,249 16,616 8,063 Loss on disposal of a business 4,502 — — Acquired IPR&D 22,082 — — Other, net 9,550 16,339 ( 2,613 ) Changes in operating assets and liabilities: Other receivables and assets 32,939 ( 6,071 ) ( 7,756 ) Prepaid data assets 49,859 ( 8,757 ) 6,000 Unearned revenue ( 36,771 ) ( 28,038 ) ( 41,076 ) Accounts payable ( 2,616 ) 6,435 ( 987 ) Accrued development expense ( 2,328 ) ( 264 ) 2,705 Accrued expenses and other current liabilities ( 7,407 ) 5,519 6,719 Lease liabilities ( 19,988 ) ( 15,582 ) ( 9,862 ) Net cash used in operating activities ( 371,808 ) ( 359,174 ) ( 287,780 ) Cash flows from investing activities Net cash acquired in the acquisition of a business — 277,104 1,844 Purchases of property and equipment ( 6,469 ) ( 13,695 ) ( 11,955 ) Purchases of intangible assets ( 2,158 ) ( 3,350 ) ( 597 ) Decrease in cash related to disposal of a business ( 4,438 ) — — Purchases of investments ( 3,806 ) — — Sales and maturities of investments — — 480 Net cash provided by (used in) investing activities ( 16,871 ) 260,059 ( 10,228 ) Cash flows from financing activities Proceeds from issuance of common shares, net of issuance costs 528,864 300,417 128,093 Proceeds from equity incentive plans 4,093 8,143 12,806 Repayment of long-term debt and finance lease liabilities ( 8,425 ) ( 4,440 ) ( 766 ) Purchase of an intangible asset ( 3,000 ) — — Net cash provided by financing activities 521,532 304,120 140,133 Effect of exchange rate changes on cash, cash equivalents and restricted cash 18,044 ( 3,406 ) 188 Net change in cash, cash equivalents and restricted cash 150,897 201,599 ( 157,687 ) Cash, cash equivalents and restricted cash, beginning of period 603,024 401,425 559,112 Cash, cash equivalents and restricted cash, end of period $ 753,921 $ 603,024 $ 401,425 Supplemental disclosure of non-cash investing and financing information Issuance of shares for the acquisitions of businesses and assets $ 20,315 $ 630,124 $ 89,269 Issuance of shares for Tempus agreement 32,000 22,000 22,000 Accrued property and equipment — 439 2,439 Purchase of an intangible asset — 6,000 — See the accompanying notes to these consolidated financial statements. 163 Table of Contents Recursion Pharmaceuticals, Inc. Notes to Consolidated Financial Statements Note 1. Description of the Business Recursion Pharmaceuticals, Inc. (Recursion, the Company, we or our) is a clinical stage TechBio company decoding biology and chemistry to industrialize drug discovery. The Recursion Operating System (OS), a platform built across diverse technologies, enables the Company to map and navigate trillions of biological and chemical relationships within the Recursion Data Universe, one of the world’s largest proprietary biological and chemical datasets. The Company integrates physical and digital components as iterative loops of atoms and bits scaling wet lab biology and chemistry data organized into virtuous cycles with computational tools to rapidly translate in silico hypotheses into validated insights and novel chemistry. As of December 31, 2025, the Company had an accumulated deficit of $ 2.1 billion. The Company expects to incur substantial operating losses in future periods and will require additional capital to advance its drug candidates. The Company does not expect to generate significant revenue until the Company successfully completes significant drug development milestones or in collaboration with third parties, which the Company expects will take a number of years. In order to commercialize its drug candidates, the Company or its partners need to complete clinical development and comply with comprehensive regulatory requirements. The Company is subject to a number of risks and uncertainties similar to those of other companies of the same size within the biotechnology industry, such as the uncertainty of clinical trial outcomes, uncertainty of additional funding and a history of operating losses. The Company has funded its operations to date primarily through the issuance of Class A common stock (see Note 8, “Common Stock” for additional details). Additionally, the Company has received payments from its strategic partnerships (see Note 9, “Collaborative Development Contracts” for additional details). Recursion will likely be required to raise additional capital. As of December 31, 2025, the Company did not have any unconditional outstanding commitments for additional funding. If the Company is unable to access additional funds when needed, it may not be able to continue the development of its products or the Company could be required to delay, scale back or abandon some or all of its development programs and other operations. The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, could materially harm its business, financial condition and results of operations. Recursion believes that the Company’s existing cash and cash equivalents will be sufficient to fund the Company’s operating expenses and capital expenditures for at least the next 12 months. Note 2. Summary of Significant Accounting Policies Use of Estimates The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires the Company to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those amounts. Significant estimates and assumptions include the estimated progress towards the satisfaction of performance obligations to record revenue, the valuation of goodwill and intangible assets, accrued research and development expenses and the fair value of stock-based awards issued. Basis of Presentation The consolidated financial statements include the accounts of Recursion and its wholly-owned subsidiaries that the Company controls. Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. 164 Table of Contents Segment Information Recursion operates and is managed as a single operating segment. The Company’s chief operating decision maker is its Chief Executive Officer, who allocates resources and assesses performance at the consolidated level. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. These financial instruments are primarily held at several financial institutions that management believes are of high credit quality. Recursion’s primary bank accounts significantly exceed the federally insured limits. The Company is dependent on third-party suppliers for certain research and development activities including preclinical and clinical testing. In particular, the Company relies on and expects to continue to rely on a small number of these suppliers. These activities could be adversely affected by a significant interruption to Recursion’s third-party suppliers including a delay in the Company’s preclinical and clinical testing and the supply of certain consumable products and compounds. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents includes bank deposits held in checking accounts and money market funds. Short-term highly liquid investments with maturities of three months or less at the time of purchase are classified as cash and cash equivalents. The Company is required to maintain a cash balance in a collateralized account to secure the Company’s credit cards. Additionally, the Company holds restricted cash related to an outstanding letter of credit issued by J.P. Morgan, which was obtained to secure certain Company obligations relating to tenant improvements. Additionally, the Company holds restricted cash related to some grants, for which the funds are contractually limited to specific research and development expenditures. Recursion also holds restricted cash as required by a lease agreement. Property and Equipment Property and equipment is carried at acquisition cost less accumulated depreciation. The cost of normal, recurring or periodic repairs and maintenance activities related to property and equipment are expensed as incurred. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. The estimated useful lives by asset classification are generally as follows: Computer and Office Equipment 5 years Lab Equipment 7 years Leasehold Improvements Lesser of 15 years or the remainder of the lease Property and equipment are reviewed for impairment as discussed below under Long-Lived Assets Impairment. Long-Lived Assets Impairment The Compa ny reviews the carrying amounts of long-lived assets, including property and equipment, intangible assets and right-of-use leased assets for potential impairment when events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. In evaluating recoverability, Recursion groups assets and liabilities at the lowest level such that the identifiable cash flows relating to the group are largely independent of the cash flows of other assets and liabilities. The Company then compares the carrying amount of the asset group with the projected undiscounted future cash flows to be generated by the asset group. If the undiscounted cash flows of the asset group is lower than its respective carrying value, an impairment charge is recorded as the amount by which the carrying amount of the asset group exceeds the fair value. Goodwill and Indefinite Intangible Assets Impairment Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Indefinite-lived intangible assets 165 Table of Contents primarily include in-process research and development (IPR&D) acquired in business combinations with indefinite lives. The Company performs its annual goodwill and indefinite-lived intangible assets impairment test in the fourth quarter, or more frequently if an interim triggering event occurs that may indicate potential impairment. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount. Some of the factors considered in the qualitative assessment include general macro-economic conditions, conditions specific to the industry and market, cost factors, the overall financial performance and whether there have been sustained declines in the Company's share price. If the Company concludes it is more likely than not that the fair value of the reporting unit or IPR&D is less than its carrying amount, a quantitative impairment test is performed. For its quantitative impairment tests, the Company uses an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, the selection of an appropriate discount rate and other assumptions and estimates. The estimates and assumptions used are consistent with the Company's business plans and a market participant's views. The use of alternative estimates and assumptions could increase or decrease projected cash flows and the estimated fair value. Business Combinations Results of operations of acquired companies are included in the Recursion results of operations as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values at the date of acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred. Accruals for Research and Development Expenses and Clinical Trials As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from obligations under contracts with vendors and clinical research organizations. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment terms that do not match the periods over which materials or services are provided for under such contracts. The Company’s policy is to record these expenses during the period in which services are performed and efforts are expended. The Company determines accrual estimates by taking into account discussions with applicable personnel and outside service providers as to the progress of clinical trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each Consolidated Balance Sheet date based on the facts and circumstances known to it at that time. The actual expenses could be different from the amounts accrued. Leases The Company rents facilities under operating lease agreements and recognizes rent expense on a straight-line basis over the term of the lease. Certain lease agreements contain tenant improvement allowances, rent holidays, scheduled rent increases and renewal options. Rent holidays and scheduled rent increases are included in the determination of rent expense. Certain leases also include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes and usage-based amounts. Recursion recognizes these costs as they are incurred. Right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. Present value is determined using an incremental borrowing rate when the rate implicit in the lease is not readily determinable. The incremental borrowing rate is equal to the rate of interest that Recursion would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. Renewals are not included in the determination of the lease term unless they are determined to be reasonably certain to be exercised at the commencement date of the 166 Table of Contents lease. The Company recognizes rent expense beginning on the date the Company obtains the legal right to use and control the leased space. Recursion classifies leases as operating or finance at the lease commencement date. The Company has elected to apply the practical expedient for short-term leases whereby Recursion does not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. The Company has also elected to not separate consideration in the contract between lease and non-lease components of a contract that contains a lease. Right-of-use assets and lease liabilities are remeasured upon certain remeasurement events using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. Revenue Recognition Operating revenue has primarily been generated through research and development agreements (see Note 9, “Collaborative Development Contracts” for additional details). Revenue for research and development agreements is recognized as the Company satisfies a performance obligation by transferring the promised services to the customer. The Company recognizes revenue over time by measuring the progress toward complete satisfaction of the relevant performance obligation using an appropriate input or output method based on the services promised to the customer. This method of recognizing revenue requires the Company to make estimates of the work required to complete the performance obligation in order to determine the progress towards completion. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. The Company may also provide options in its agreements under which a partner could request that Recursion provide additional services in the future. Recursion evaluates whether these options are material rights at the inception of the agreement. If the Company determines an option is a material right, Recursion will consider the option a separate performance obligation. Cost of Revenue Cost of revenue consists of the Company’s costs to provide services for drug discovery required under performance obligations with partnership customers. These primarily include materials costs, service hours performed by the Company’s employees, costs from third party contract research organizations and depreciation of property and equipment. Consumables purchased to be used in the future to satisfy performance obligations are recognized on the Consolidated Balance Sheet until consumed. Research and Development Research and development expenses comprise of costs incurred in performing research and development activities other than those performed pursuant to contracts with customers, including drug discovery and development studies, external research and the purchase of laboratory supplies. The Company recognizes expenses associated with third-party contracted services based on the completion of activities as specified in the applicable contracts. Upon the termination of contracts with third-parties, the Company’s financial obligations are generally limited to costs incurred or committed to date. Any advance payments for goods or services to be used or rendered in future research and product development activities are classified as prepaid expenses until the goods or services are rendered. Stock-Based Compensation The Company issues stock-based awards to employees and non-employees, generally in the form of stock options and restricted stock units (RSUs). Most of the Company’s stock-based awards have been made to employees. Recursion measures compensation expense for equity awards at their grant-date fair value and recognizes compensation expense over the requisite service period on a straight-line basis or using the graded vesting method. For stock-based awards with a performance condition , Recursion recognizes stock-based compensation expense based on the probable outcome of the performance condition. Awards generally vest over four years for employees. Recursion recognizes the impact of forfeitures on stock-based compensation expense as they occur. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model, which requires inputs for the expected term, stock price volatility, dividend yield and the risk-free interest rate of the options. The expected term is based on the simplified method since the Company does not have sufficient historical exercise 167 Table of Contents data to estimate the expected term. The volatility is based on an average peer historical volatility over the expected term of the option. The expected dividend yield is assumed to be zero as Recursion has never paid dividends and does not have current plans to pay dividends. The risk-free interest rate is based on the rates available at the time of the grant for zero-coupon U.S. government issues with a remaining term equal to the option's expected term. The grant date fair value of RSUs is determined using the market price of the Company’s common stock at grant date. For stock-based awards with a market condition, the grant date fair value is determined using a Monte Carlo simulation and stock-based compensation expense is recognized using the accelerated attribution method over the implied service period. When a market condition is satisfied in a period before the end of the implied service period, any remaining unrecognized compensation cost is recognized. Stock-based compensation is recorded in cost of revenue, research and development expense and general and administrative expense based on the role of the employee. Income Taxes Income taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pretax losses based on current tax laws. Deferred taxes are recognized using enacted tax rates on the future tax consequences of temporary differences, which are the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and the tax benefits of carryforwards. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. For uncertain tax positions, Recursion determines whether the position is more-likely-than-not to be sustained upon examination based on the technical merits of the position. Any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the Consolidated Financial Statements at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. Recursion receives certain cash refundable research and development tax credits including the research and development expenditure credit (RDEC) in the United Kingdom. The Company records these as “Research and Development” in the Consolidated Statements of Operations as the credit is earned. The amount included in the Consolidated Statements of Operations for the year ended December 31, 2025 was $ 7.7 million. The Company records the amount receivable in “Other receivables” on the Consolidated Balance Sheet. Foreign Currency The functional currency for several of Recursion’s foreign subsidiaries is the applicable local currency. Revenues and expenses for non-U.S. dollar functional currency entities are translated into U.S. dollars using average currency exchange rates for the period. Assets and liabilities for such entities are translated using exchange rates at the balance sheet date. Foreign currency translation adjustments are reflected in stockholders’ equity as a component of other comprehensive income (loss). Foreign currency transaction gains and losses on transactions not denominated in functional currency are recorded in “Other income, net” in the Consolidated Statements of Operations. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) . The new standard updates disclosure requirements for Accounting Standards Codification (ASC) 740 primarily by requiring additional information in the income tax rate reconciliation and additional disclosures about income taxes paid. Recursion adopted the standard in the fourth quarter of 2025. Recursion has adopted the standard using the prospective approach and included the required disclosures in our notes to the financial statements for income taxes (See Note 12, “Income Tax”). The adoption of the amendments in ASU 2023-09 impacted the Company's disclosures in the 168 Table of Contents notes to the consolidated financial statements and did not have a material impact on its Consolidated Balance Sheets, Consolidated Statements of Operations or Consolidated Statements of Cash Flows. Recent Accounting Pronouncements Not Yet Adopted In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832). The new standard adds guidance to ASC 832 on the recognition, measurement, and presentation of government grants. This standard will be effective for Recursion starting the annual period of 2029 and for interim reporting periods within that annual reporting period. Early adoption is permitted. The amendments can be applied on a prospective, modified prospective or retrospective basis. Recursion is currently assessing the impact of adopting this guidance on its consolidated financial statements. In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-07, Derivatives and Hedging (Topic 350) and Revenue from Contracts with Customers (Topic 606). The new standard refines the scope of the guidance on derivatives in Topic 815 and clarifies the guidance on shared-based payments from a customer in ASC 606. This standard will be effective for Recursion starting the annual period of 2027 and for interim reporting periods within that annual reporting period. Early adoption is permitted. Recursion is currently assessing the impact of adopting this guidance on its consolidated financial statements. In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-06, Accounting for internal-use software costs (Topic 350) . The new standard amends specific aspects of the accounting for internal-use software costs including the criteria for capitalizing software costs. It also amends the related disclosure requirements. This standard will be effective for Recursion starting the annual period of 2029 and for interim reporting periods within that annual reporting period. Early adoption is permitted. The amendments can be applied on a prospective, modified prospective or retrospective basis. Recursion is currently assessing the impact of adopting this guidance on its consolidated financial statements. In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Disaggregation of Income Statement Expenses (Topic 220) . The standard requires new disclosures in the notes to the financial statements about certain caption expenses presented on the face of the Income Statement including information on: purchases of inventory; employee compensation; depreciation and intangible asset amortization. Recursion must also disclose a qualitative description of the amounts remaining in expense captions that are not separately disaggregated. This standard will be effective for Recursion starting the annual period of 2027. Early adoption is permitted. The amendments can be applied on a prospective or retrospective basis. Recursion is currently assessing the impact of adopting this guidance on its consolidated financial statements. Note 3. Supplemental Financial Information Tempus agreement In November 2023, Recursion entered into a five-year agreement (the Tempus Agreement) with Tempus Labs, Inc. (Tempus) to purchase access to their records of patient-centric multimodal oncology data and use rights for therapeutic development purposes. This data will be used to improve the training of Recursion’s artificial intelligence and machine learning models and is expected to accelerate Recursion’s drug discovery process. Recursion is making annual payments, ranging between $ 22.0 million and $ 42.0 million, up to $ 160.0 million in aggregate, to Tempus in cash or equity at the Company’s option. The equity value is determined by using the seven -trading day period dollar volume-weighted average price (VWAP) for Recursion Class A common stock ending on the day immediately preceding the date that is five business days prior to the payment date. Recursion is expensing the record purchases based on a contractually agreed price as “Research and Development” expenses in the Consolidated Statements of Operations as the records are downloaded. To the extent that the Recursion payments to Tempus are greater than or less than the records purchased amount, Recursion records the applicable amount to “Prepaid data assets” or “Accrued data liability” on the Consolidated Balance Sheet, respectively. The expense for the record purchases was $ 49.9 million, $ 8.4 million and $ 6.0 million for the years ended December 31, 2025, 2024 and 2023 respectively. 169 Table of Contents Property and Equipment, net December 31, (in thousands) 2025 2024 Lab equipment $ 93,164 $ 100,928 Leasehold improvements 70,778 72,727 Computer and Office equipment 28,692 27,365 Construction in progress 511 2,714 Property and equipment, gross 193,145 203,734 Less: Accumulated depreciation ( 89,214 ) ( 62,671 ) Property and equipment, net $ 103,931 $ 141,063 Depreciation expense on property and equipment was $ 33.7 million, $ 18.3 million and $ 15.9 million during the years ended December 31, 2025 , 2024 and 2023, respectively. Accrued Expenses and Other Liabilities December 31, (in thousands) 2025 2024 Accrued compensation $ 31,771 $ 50,853 Accrued compute liabilities 8,278 3,073 Accrued development expenses 2,693 5,812 Accrued early discovery expenses 4,581 3,095 Accrued professional fees 1,232 787 Materials received not invoiced 703 1,590 Accrued license fees 3,000 3,000 Accrued other expenses 17,972 13,662 Accrued expense and other liabilities $ 70,230 $ 81,872 For the year ended December 31, 2025, the decrease in accrued compensation from the prior year was driven by the Company’s decrease in headcount and initiative around strategic prioritization and streamlined operations. Restructuring In June 2025, Recursion announced a reduction in personnel program to help streamline the Company's operating strategy and post-integration efficiencies. These changes resulted in a workforce reduction of approximately 20 %. As of December 31, 2025, the Company has substantially completed the plan, which consisted of severance payments and employee benefits. Recursion recorded these costs in “ General and Administrative ” on the Consolidated Statement of Operations as incurred. The following summarizes the activity related to these restructuring actions and the related accrual as of December 31, 2025: (in thousands) Balance as of December 31, 2024 — Expense $ 9,836 Payments $ ( 8,521 ) Balance as of December 31, 2025 $ 1,315 170 Table of Contents Interest Income, net Years ended December 31, (in thousands) 2025 2024 2023 Interest income $ 22,788 $ 15,758 $ 19,116 Interest expense ( 1,810 ) ( 1,572 ) ( 97 ) Interest income, net $ 20,978 $ 14,186 $ 19,019 For the years ended December 31, 2025, 2024 and 2023, interest income primarily related to earnings on cash and cash equivalents in money market funds. Interest expense primarily related to the Company’s supercomputer financing lease. Interest income, net was included in “Other income, net” on the Consolidated Statements of Operations. Note 4. Acquisitions RE Ventures I In July 2025, Recursion acquired Rallybio’s interest in the joint venture, RE Ventures I, such that Recursion now owns 100 % of the interest in RE Ventures I for total consideration of $ 20.2 million. Recursion determined that this transaction met the criteria for as an asset acquisition since the lead asset, ENPP1 (Rec-102), an inhibitor program for the treatment of hypophosphatasia (HPP), represented substantially all of the fair value of the gross assets acquired. For the year ended December 31, 2025, Recursion recorded an expense of $ 20.2 million, representing an acquired in-process research and development (IPR&D) asset with no alternative future use, to “Research and Development” on the Consolidated Statements of Operations. Subsequent to closing, in August 2025, Recursion issued additional consideration as part of a required milestone payment related to the RE Ventures I transaction for the initiation of an additional preclinical study. This included the settlement of the previously recorded contingent consideration liability. As a result, Recursion recorded an additional expense of $ 2.4 million acquired IPR&D, which was recorded to “Research and Development” on the Consolidated Statements of Operations. The following table summarizes the total consideration transferred at acquisition date: (in thousands) Recursion Class A common stock $ 7,815 Contingent consideration liability 11,875 Transactions costs 292 Cash paid 171 Total $ 20,153 The following table summarizes the consideration transferred for the milestone: (in thousands) Recursion Class A common stock $ 12,500 Cash paid 1,768 Total $ 14,268 As part of the agreement, Rallybio is eligible to receive additional milestone payments under certain conditions. Milestone payment obligations that are incurred prior to regulatory approval of the compound will be expensed as acquired IPR&D when recognized. 171 Table of Contents Sale of Exscientia GmbH In March 2025, Recursion completed the sale of its Austrian operations (Exscientia GmbH) to a newly formed company, Alpha Biotechnology GmbH (Alpha). As part of the sale, Recursion obtained a 49 % equity interest in Alpha. Recursion entered into this transaction as part of focusing its efforts and moderating spend. Alpha is a company leveraging a patient-tissue platform for the development of precision therapeutics for the treatment of hematological and solid cancers. For the year ended December 31, 2025, Recursion recorded a loss on the disposal of Exscientia GmbH of $ 4.5 million, which was classified as “Other income (loss), net” on the Consolidated Statement of Operations. Recursion also recorded a $ 4.4 million investment on the Consolidated Balance Sheet within “Other assets, non-current” related to its 49 % equity interest in Alpha, which was determined to be an equity method investment. Exscientia plc On November 20, 2024, Recursion acquired all of the outstanding equity interests of Exscientia plc (“Exscientia”), a United Kingdom based public company that was registered on the Nasdaq Global Select Market. Exscientia is a drug design company utilizing its artificial intelligence platform to efficiently design and develop differentiated medicines for diseases with high unmet patient needs. Their focus is on utilizing their platform to develop best in class molecules with improvements to known or likely points of failure to improve the probability of developmental success. The Company believes the combination of the Recursion and Exscientia platforms and pipelines will position it to be a leader of the AI-enabled drug discovery and development space. The acquisition of Exscientia was accounted for as a business combination using the acquisition method of accounting. The consideration transferred of approximately $ 630.1 million consisted of $ 616.9 million in Recursion Class A shares and $ 13.2 million related to the portion of Exscientia share based awards that were replaced with Recursion share based awards that is attributable to pre-combination service. Approximately 102.1 million Recursion Class A shares were issued in exchange for Exscientia ordinary shares using a fixed exchange ratio of one Exscientia ordinary share converts to 0.7729 Recursion Class A shares (the “Exchange Ratio”). In addition, Recursion replaced all outstanding Exscientia share based awards with Recursion share based awards wherein the vesting schedule and other applicable terms were carried over except for the exercise price of share options which were adjusted using the 0.7729 exchange ratio. This included Exscientia’s stock options and restricted stock units. Recursion used $ 6.04 , the Company’s share price on November 20, 2024 to calculate the consideration transferred. See Note 10, “Stock-Based Compensation” for additional information on the Exscientia share based awards. For the year ended December 31, 2025, Recursion updated the deferred tax liabilities from the acquisition, which were incomplete as of December 31, 2024. As a result, Recursion adjusted the provisional deferred tax liabilities to reflect the additional information obtained about the facts and circumstances that existed as of the acquisition date. As a result, deferred tax liabilities and goodwill increased by $ 6.0 million. 172 Table of Contents The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Cash and cash equivalents $ 277,104 Other receivables 48,408 Other current assets 12,843 Property and equipment 61,961 Operating lease right-of-use assets 20,271 Intangible assets, technology 182,000 Intangible assets, indefinite-lived 129,000 Deferred tax assets 1,934 Other assets, non-current 930 Accounts payable and accrued liabilities ( 40,780 ) Lease liabilities ( 21,679 ) Deferred revenue ( 120,905 ) Deferred tax liability ( 23,077 ) Other liabilities ( 1,572 ) Total identifiable net assets $ 526,438 Goodwill 103,686 Total assets acquired and liabilities assumed $ 630,124 Acquired contract liabilities in the scope of ASC 606 are an exception to the ASC 805 fair value measurement principle and were measured as if Recursion had originated the acquired contract. Two acquired customer contracts had contract liabilities and for each contract Recursion reassessed the identification of performance obligations, determination of transaction price, allocation of transaction price, and measure of progress for each performance obligation as if Recursion has been party to the original contract and recognized the resulting contract liability as a liability assumed. No contract assets in the scope of ASC 606 were acquired. The intangible assets of Exscientia consist of the Exscientia artificial intelligence platform and four clinical stage oncology in process research and development (IPR&D) assets. The operating system is a critical tool used for both designing molecules for fulfilling collaboration agreements and Exscientia’s own research and development projects. The fair value of each intangible asset was valued based on the present value of future discounted cash flows prepared under the multi-period excess earnings method with the significant inputs being the estimates of future revenues, future expenses, the discount rate of 10.5 % and probabilities of technological and regulatory success. The platform asset is being amortized on a straight line basis ove r a six year useful life. The IPR&D assets have been assigned an indefinite useful life and will be tested for impairme nt prospectively and, if regulatory approval is achieved, will be assigned a useful life and amortization will commence. Goodwill was calculated based on the excess of the consideration transferred over net assets acquired. The goodwill recognized represents the assembled workforce, future research and development projects enabled by the platform that do not yet have sufficient substance to meet the definition of in-process research and development assets and expected synergies such as the integration of Recursion and Exscientia platforms. The goodwill is not deductible for tax purposes. Recursion’s Consolidated Statement of Operations for the year ended December 31, 2025 includes $ 35.3 million of revenue and $ 158.4 million of operating loss from Exscientia operations. The valuation of the assets acquired and liabilities assumed was finalized during the three months ended December 31, 2025. Unaudited Pro forma financial information The following unaudited pro forma summary presents consolidated revenue and earnings of Recursion as if the Exscientia business combination had occurred on January 1, 2023 . 173 Table of Contents Year ended December 31, (in thousands) 2024 2023 Revenue $ 82,643 $ 72,504 Operating loss 678,717 548,716 The unaudited pro forma amounts have been calculated after converting the Exscientia financial information to U.S. GAAP, applying Recursion accounting policies, and applying the acquisition method of accounting at January 1, 2023. Recursion incurred approximately $ 20.5 million of transaction costs which are presented in general and administrative expenses in the statement of operations for the year ended December 31, 2024 and are reflected in the pro forma operating loss for the year ended December 31, 2023. Recursion did not have any material, nonrecurring pro forma adjustments directly attributable to the Exscientia business combination that are included in the pro forma information. Note 5. Leases The Company has entered into various long-term real estate operating leases primarily related to office, research and development, operating activities and an equipment financing lease related to the supercomputer. The Company’s leases have remaining terms from under one year to seven years and some of those leases include options that provide Recursion with the ability to extend the lease term, generally for five years . The options are included in the lease term when it is reasonably certain that the option will be exercised. For the year ended December 31, 2025, Recursion entered into lease modifications and terminations resulting in a decrease to the right-of-use asset and lease liability of $ 10.1 million. The modifications had no impact to the Consolidated Statements of Operations. This impact included the lease surrender of the Vienna facilities of Exscientia GmbH in March 2025 , which resulted in a $ 5.2 million reduction to both the right-of-use asset and lease liability. In connection with this surrender, the Company also incurred a lease termination fee of $ 5.2 million, which was classified as “Other income (loss), net” on the Consolidated Statement of Operations. Additionally, the Company entered into a lease modification related to the Schrodinger leases to decrease the lease terms, which now ended during the second quarter of 2025 . This resulted in a decrease to both the right-of-use asset and lease liability by $ 4.9 million. As a part of the lease modifications and termination, Recursion recorded leasehold impairments of $ 6.0 million. For the year ended December 31, 2024, Recursion entered into lease modifications resulting in a decrease to the right-of-use assets and lease liabilities of $ 3.1 million. The modifications had no impact to the Consolidated Statements of Operations. For the year ended December 31, 2024 , Recursion entered into finance lease additions resulting in an increase to the right-of-use asset and lease liability of $ 30.3 million. The components of the lease cost were as follows: Years ended December 31, (in thousands) 2025 2024 2023 Operating lease cost $ 16,086 $ 12,078 $ 8,144 Finance lease cost: Amortization of leased assets 6,063 4,042 — Interest on lease liabilities 1,744 1,487 — Variable lease cost 3,936 3,330 2,116 Short-term lease cost 249 208 139 Total lease cost $ 28,078 $ 21,145 $ 10,399 174 Table of Contents Supplemental balance sheet information related to leases were: (in thousands) December 31, 2025 December 31, 2024 Assets Operating lease right-of-use assets $ 45,339 $ 65,877 Financing lease right-of-use assets 20,210 26,273 Total lease right-of-use assets $ 65,549 $ 92,150 Liabilities Current liabilities Financing lease liabilities $ 8,967 $ 8,311 Operating lease liabilities 12,663 13,795 Total current lease liabilities 21,630 22,106 Non-current liabilities Financing lease liabilities, non-current 9,371 18,338 Operating lease liabilities, non-current 46,647 67,250 Total non-current lease liabilities 56,018 85,588 Total lease liabilities $ 77,648 $ 107,694 Supplemental cash flow information related to leases were: Years ended December 31, (in thousands) 2025 2024 2023 Cash paid for amount included in the measurement of lease liabilities: Operating cash flows from operating leases $ 18,244 $ 14,095 $ 9,862 Operating cash flows from financing leases 1,744 1,487 — Financing cash flows from financing leases 8,311 3,666 — Right-of-use assets additions, modifications and terminations: Operating leases $ ( 10,084 ) $ 19,455 $ 4,968 Financing leases — 30,315 — Lease term and discount rates were: Years ended December 31, (in thousands) 2025 2024 Operating leases Weighted-average remaining lease term (years) 4.1 5.3 Weighted-average discount rate 7.9 % 7.7 % Finance leases Weighted-average remaining lease term (years) 1.6 2.6 Weighted-average discount rate 7.6 % 7.6 % 175 Table of Contents Maturities of operating lease liabilities as of December 31, 2025 were: (in thousands) Operating leases Finance leases 2026 17,467 10,055 2027 17,827 9,707 2028 15,171 — 2029 8,201 — 2030 6,315 Thereafter 7,702 — Total lease payments 72,683 19,762 Less: imputed interest ( 13,373 ) ( 1,424 ) Present value of lease liabilities $ 59,310 $ 18,338 Note 6. Goodwill and Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill: (in thousands) Balance as of December 31, 2023 $ 52,056 Additions from acquisitions 97,735 Foreign currency translation adjustments ( 918 ) Balance as of December 31, 2024 148,873 Additions from acquisitions 5,947 Foreign currency translation adjustments 7,338 Balance as of December 31, 2025 $ 162,158 The additions to goodwill related to the acquisition of Exscientia. See Note 4, “Acquisitions” for additional details. No goodwill impairment was recorded during the years ended December 31, 2025, 2024 and 2023. Intangible Assets, Net The following table summarizes intangible assets: December 31, 2025 December 31, 2024 (in thousands) Gross carrying amount Accumulated Amortization Net carrying amount Gross carrying amount Accumulated Amortization Net carrying amount Definite-lived technology intangible assets $ 236,497 $ ( 69,156 ) $ 167,341 $ 224,362 $ ( 24,544 ) $ 199,818 Definite-lived licensed intangible assets 11,158 ( 6,619 ) 4,539 9,350 ( 2,088 ) 7,262 Indefinite-lived intangible assets 138,023 — 138,023 128,775 — 128,775 Total intangible assets $ 385,678 $ ( 75,775 ) $ 309,903 $ 362,487 $ ( 26,632 ) $ 335,855 Amortization expense was $ 50.3 million, $ 18.8 million and $ 8.5 million during the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense was primarily included in “Research and Development” in the Consolidated Statements of Operations. Amortization expense for the definite-lived intangible assets will be recognized over approximately the next five years . 176 Table of Contents The estimated annual amortization expense for the definite-lived intangible assets recorded as of December 31, 2025 is as follows: (in thousands) 2026 2027 2028 2029 2030 Estimated annual amortization expense $ 41,005 $ 32,616 $ 30,340 $ 30,333 $ 30,333 The indefinite-lived intangible assets primarily represent in-process research and development (IPR&D) intangibles acquired in business combinations. See Note 4, “Acquisitions” for additional details on the intangible assets acquired. No indefinite-lived intangible asset impairment charges were recorded during the years ended December 31, 2025, 2024 and 2023. Note 7. Commitments and Contingencies Indemnification The Company has agreed to indemnify its officers and directors for certain events or occurrences, while the officer or director is or was serving at the Company’s request in such capacity. The Company purchases directors and officers liability insurance coverage that provides for reimbursement to the Company for covered obligations and this is intended to limit the Company’s exposure and enable it to recover a portion of any amounts it pays under its indemnification obligations. The Company had no liabilities recorded for these agreements as of December 31, 2025 and December 31, 2024, as no amounts were probable. Employee Agreements The Company has signed employment agreements with certain key employees pursuant to which, if their employment is terminated following a change of control of the Company, the employees are entitled to receive certain benefits, including accelerated vesting of equity incentives. Legal Matters The Company may, from time to time, be involved in various legal proceedings arising in the normal course of business. An unfavorable resolution of any such matter could materially affect the Company’s future financial position, results of operations or cash flows. In April 2024, a putative class action complaint was filed in the U.S. District Court for the District of New Jersey against Exscientia plc, Andrew Hopkins, Ben R. Taylor and David Nicholson (Campanile v. Exscientia plc, Case No. 1:24-cv-05692). In June 2024, a separate complaint was filed against the same defendants in the U.S. District Court for the District of New Jersey (Case 1:24-cv-07181). Both complaints allege that the defendants violated federal securities laws by, among other things, making materially false and misleading statements regarding Exscientia’s business, operations and prospects. The complaints seek unspecified compensatory damages, as well as an award of reasonable attorneys’ fees and other costs, on behalf of persons and/or entities which purchased Exscientia securities between March 2022 and February 2024. The cases were consolidated and plaintiffs filed an amended complaint on November 11, 2024 against Exscientia plc, Andrew Hopkins and David Nicholson, and the Company moved to dismiss on January 21, 2025. In October 2025, that motion to dismiss was granted and the District Court dismissed the plaintiff’s claims without prejudice; permitting leave to re-file the complaint within 30 days. No further complaint was filed as of that deadline and the Court dismissed the amended complaint with prejudice in December 2025. In February 2021, the Company entered into a lease agreement for laboratory and office space (the Industry Lease) with Industry Office SLC, LLC (the landlord). In March 2023, the Company sent a letter to the landlord detailing numerous construction delays and irregularities, deficiencies and deviations from applicable structural drawings and/or non-conforming conditions with applicable building codes (collectively, the Claims). On June 23, 2023, the landlord filed a lawsuit against the Company (Industry Office SLC, LLC v. Recursion Pharmaceuticals, Inc., Case No. 230904627) amended in October 2023, in the Third District Court for Salt Lake County, State of Utah (the Court), alleging anticipatory repudiation, breach of contract and breach of the implied covenant of good faith and fair dealing and seeks monetary damages and attorney’s fees. As of December 31, 2025, the Company had no liability 177 Table of Contents recorded for these events as an unfavorable outcome was not probable. In September 2023, the Company filed claims in the Court against the landlord alleging, among other things, breach of contract and fraudulent misrepresentation (the Counterclaims). In October 2023, the landlord filed an answer and denied the Company’s allegations asserted in the Counterclaims. The Company and the landlord are currently engaged in discovery. The Company is unable to estimate the possible amount or range of damages associated with the Counterclaims. Pledged Assets As of December 31, 2025 , assets pledged as collateral against finance leases totaled $ 16.6 million. Assets pledged as collateral are Lab Equipment reported in “Property and Equipment, net” on the Consolidated Balance Sheet. As of December 31, 2025 , the liabilities associated with collateral pledged were solely comprised of a finance lease and had a carrying value of $ 18.3 million. The collateral pledged under the lease agreement may only be operated by the Company within the continental United States and must maintain a good title. The assets cannot be sold, disposed of or repledged by the Company. Note 8. Common Stock Each share of Class A common stock entitles the holder to one vote per share and each share of Class B common stock entitles the holder to 10 votes per share on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s Board of Directors. As of December 31, 2025 and December 31, 2024, no dividends had been declared. At-The-Market Offering (Citi) In February 2025, the Company entered into a Sales Agreement (the Citi Sales Agreement) with Citigroup Capital Markets Inc. (Citi) to provide for the offering, issuance and sale of up to an aggregate amount of $ 500.0 million of its Class A common stock from time to time in “at-the-market” (ATM) offerings (the Citi ATM Offering). The Citi ATM Offering was made under a prospectus supplement dated February 28, 2025 and related prospectus filed with the Securities and Exchange Commission pursuant to the Company’s automatically effective shelf registration statement on Form S-3 (Registration No. 333-284878). For the year ended December 31, 2025 , the Company sold 99.9 million shares and received net proceeds of $ 491.7 million under the agreement. As of December 31, 2025, no amount remained available for future sales under the Sales Agreement as the offering was fully utilized during the year ended December 31, 2025 . At-The-Market Offering (Jefferies) In August 2023 , the Company entered into an Open Market Sales Agreement (the “Jefferies Sales Agreement”) with Jefferies LLC ( “Jefferies”), to provide for the offering, issuance and sale of up to an aggregate amount of $ 300.0 million of its Class A common stock from time to time in ATM offerings. In February 2025, the Company terminated the Jefferies Sales Agreement. In total, the Company sold 26.8 million shares and received net proceeds of $ 199.1 million under the agreement through its termination. Of the total sales and net proceeds, the Company sold 4.9 million shares and received net proceeds of $ 36.9 million under the agreement in 2025, prior to its termination. The Company paid Jefferies a commission of up to 3 % of the aggregate gross proceeds received from all sales of Class A common stock. The Jefferies ATM Offering was made under a prospectus supplement dated August 8, 2023 and related prospectus filed with the Securities and Exchange Commission pursuant to the Company’s automatically effective shelf registration statement on Form S-3ASR (Registration No. 333-264845). Public Offering of Common Stock In June 2024, the Company closed its public offering of Class A common stock and issued 35.4 million shares at a price of $ 6.50 per share for net proceeds of approximately $ 216.4 million, after deducting transaction costs of $ 13.6 million. In connection with the public offering of Class A common stock, the Company entered into an underwriting agreement for the offering and sale of 30.8 million shares. The Company also granted the Underwriters a 30 day option from the date of the underwriting agreement to purchase up to an additional 4.6 million shares of Class A common Stock, which was exercised in full. The public offering was made pursuant to the Company's effective 178 Table of Contents registration statement on Form S-3 (File No. 333-264845) and a related prospectus supplement and accompanying prospectus dated June 26, 2024. Valence Acquisition Exchangeable Shares In May 2023, in connection with the acquisition of Valence, the Company entered into an agreement to issue up to 5.9 million shares of Class A common stock (the “Exchangeable Shares”), that may be issued upon exchange, retraction or redemption of exchangeable shares of a subsidiary of Recursion. Each exchangeable share of the subsidiary of Recursion entitles the holder to exchange those shares on a one -for-one basis for Recursion’s Class A common stock. The shares are entitled to receive dividends economically equivalent to dividends declared by Recursion, are non-voting and are subject to customary adjustments for stock splits or other reorganizations. In addition, the Company may require all outstanding exchangeable shares to be exchanged into an equal number of Class A common stock upon the occurrence of certain events and at any time following the seventh anniversary of the closing of the Valence acquisition. The exchangeable shares are substantially the economic equivalent of the Class A shares and classified as common stock within the Company’s stockholders’ equity. The Company’s calculation of weighted-average shares outstanding includes the exchangeable shares. As of December 31, 2025, 5.0 million Exchangeable shares have been redeemed for Class A shares. Registration Rights Agreements Tempus agreement In November 2023, in connection with the Tempus Agreement, the Company agreed to prepare and file a registration statement (or a prospectus supplement to an effective registration statement on Form S-3ASR that will become automatically effective upon filing with the SEC pursuant to Rule 462(e)) with the SEC, for resale of the shares of Class A common stock issued or issuable under the Tempus Agreement. A prospectus supplement to a registration statement (File No. 333-264845) was subsequently filed in December 2023 to register shares issued to Tempus for the initial license fee under the Tempus Agreement for resale. In December 2024 , a prospectus supplement to a registration statement (File No. 333-264845) was filed to register shares issued to Tempus in payment for the 2024 annual fee. Such registration statement (File No. 333-264845) subsequently expired. A new registration statement (333-284878) was filed in February 2025 and a prospectus supplement covering all shares that have been issued under the Tempus Agreement and remained held by Tempus was filed in May 2025, and i n November 2025 , a prospectus supplement was filed to register shares issued to Tempus in payment for the 2025 annual fee. After registration of any shares issued to Tempus under the Tempus Agreement, the Company has agreed to use commercially reasonable efforts to keep such registration statement effective until such date that all shares issued to Tempus covered by such registration statement have been sold or are able to be publicly sold by relying on Rule 144 of the Securities Act without registration. Acquisitions In November 2024, in connection with the acquisition of Exscientia, the Company entered into a Registration Agreement providing for the registration for resale of the shares of Class A common stock issued for Recursion stock options and RSUs under the assumed Exscientia plans and the Inducement awards. A registration statement on Form S-8 (File No. 333-283347) was filed to register the shares for resale by the holders. The registration statement must remain effective as long as such Recursion stock options and RSUs remain outstanding. In May 2023 , in connection with the acquisition of Valence, the Company entered into a Registration Agreement providing for the registration for resale of the shares of Class A common stock and Exchange Shares issued or issuable in such transaction. A registration statement on Form S-3ASR (File No. 333-272281) was filed to register the shares for resale by the holders. The registration statement must remain effective for a period of not less than three years . Class A and B Common Shares Authorization In April 2021 , the Company’s Board of Directors authorized two classes of common stock, Class A and Class B. The rights of the holders of Class A and B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share and is convertible at any time into one share of Class A common stock. 179 Table of Contents Note 9. Collaborative Development Contracts Sanofi Description In January 2022, the Company and Sanofi entered into a collaboration agreement to develop an AI-driven pipeline of precision-engineered medicines. The research is focused on up to 15 novel small molecule candidates across oncology and immunology and utilizes the Company’s AI platform. The Company is leading small molecule drug design and lead optimization activities with Sanofi assuming responsibility for preclinical and clinical development, manufacturing and commercialization. Pricing The Company received a $ 100.0 million non-refundable upfront payment. In April 2025, Recursion received a $ 7.0 million payment related to the achievement of a milestone for one of the performance obligations. The Company has also received multiple other milestone payments related to this agreement totaling approximately $ 30.0 million. These related to the advancement of several of the discovery programs within the collaboration and the addition of an existing Company program into the collaboration. Recursion is eligible for additional milestone payments based on performance progress of the collaboration and tiered royalties ranging from high-single-digits to mid-teens. Recursion could earn a maximum of $ 555.0 million from all research milestones and $ 1.8 billion from all development and regulatory milestones. Accounting In November 2024, Recursion acquired Exscientia as part of an acquisition. See Note 4, “Acquisitions” for additional information. As such, the initial Recursion accounting analysis for this transaction was done as of the business combination date as if Recursion had originated the contract. This agreement represents a transaction with a customer and therefore is accounted for in accordance with ASC 606. Recursion has determined that it has at least eight performance obligations related to the small molecule projects. These performance obligations are for performing research and development services for Sanofi to design small molecules and perform lead optimization activities. The performance obligations also include potential licenses related to the intellectual property. The Company concluded that licenses within the contract are not distinct from the research and development services as they are interrelated due to the fact that the research and development services significantly impact the potential licenses. Any additional services are considered customer options and will be considered as separate contracts for accounting purposes. The Company has determined the transaction price to be $ 152.6 million, for the initial performance obligations, comprised of the upfront payment, several milestones that have been achieved and estimated additional target exercises. The consideration did not include the $ 7.0 million variable consideration milestone until the milestone was achieved, which was during the second quarter of 2025. Recursion is now recognizing the milestone as part of the transaction price over the completion period for the related performance obligation. Recursion has fully constrained the amounts of remaining variable consideration to be received from potential milestones considering the stage of development and the risks associated with the remaining development required to achieve each milestone. Recursion will re-evaluate the transaction price each reporting period. The transaction price was generally allocated to the performance obligations based on the estimated relative stand-alone selling price of each performance obligation as determined using an expected cost plus margin approach. The milestone fees were allocated to related performance obligation as the terms of the variable consideration related specifically to Recursion’s efforts to satisfy the related performance obligation. The Company recognizes revenue over time based on costs incurred relative to total expected costs to perform the research and development services. Recursion determined that this method provides a faithful depiction of the transfer of control to the customer. This method of recognizing revenue requires the Company to make estimates of total costs to provide the services required under the performance obligations. Significant inputs used to determine the total costs included the number of projects to be performed, the number of substitutions related to those projects, length of time required, service hours performed by Company employees and materials costs. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion is unable to estimate the completion date of the performance obligations due to the current stage of work. 180 Table of Contents In the fourth quarter of 2025, Recursion updated its cost estimate for several performance obligations following the expiry of substitution rights related to certain projects. As a result of this update, the cost estimates for the associated performance obligations decreased, leading to an increase of $ 12.4 million in revenue recognized in the fourth quarter of 2025. Recursion accounted for this update as a change in estimate in the period of change, which included a cumulative-effect adjustment to revenue. Merck KGaA (Merck) Description In September 2023, the Company and Merck entered into a collaboration agreement to discover novel small molecule drug candidates across oncology, neuroinflammation and immunology. The collaboration utilizes the Company’s AI platform and the Company is performing drug design and discovery while Merck will be assuming responsibility for the preclinical and clinical development. Pricing The Company received a $ 20.1 million non-refundable upfront payment. Recursion is eligible for additional milestone payments based on performance progress of the collaboration and tiered royalties from the mid-single-digits to low-double-digits. The Company could earn a maximum of $ 73.0 million for discovery, development and sales milestones per project. Accounting In November 2024, Recursion acquired Exscientia as part of an acquisition. See Note 4, “Acquisitions” for additional information. As such, the initial Recursion accounting analysis for this transaction was done as of the business combination date as if Recursion had originated the contract. This agreement represents a transaction with a customer and therefore is accounted for in accordance with ASC 606. Recursion has determined that it has three performance obligations related to each project in the partnership. These performance obligations are for performing research and development services for Merck to design small molecules and perform lead optimization activities. The performance obligations also include potential licenses related to the intellectual property. The Company concluded that licenses within the contract are not distinct from the research and development services as they are interrelated due to the fact that the research and development services significantly impact the potential licenses. Any additional services are considered customer options and will be considered as separate contracts for accounting purposes. The Company has determined the transaction price to be $ 20.1 million, for the initial performance obligations, comprised of the upfront payment. Recursion will fully constrain the amounts of remaining variable consideration to be received from potential milestones considering the stage of development and the risks associated with the remaining development required to achieve each milestone. Recursion will re-evaluate the transaction price each reporting period. The transaction price was allocated to the performance obligations based on the estimated relative stand-alone selling price of each performance obligation as determined using an expected cost plus margin approach. The Company recognizes revenue over time based on costs incurred relative to total expected costs to perform the research and development services. Recursion determined that this method provides a faithful depiction of the transfer of control to the customer. This method of recognizing revenue requires the Company to make estimates of total costs to provide the services required under the performance obligations. Significant inputs used to determine the total costs included the number of projects to be performed, the number of substitutions related to those projects, length of time required, service hours performed by Company employees and materials costs. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion was unable to estimate the completion date of the performance obligations due to the current stage of work. Roche and Genentech Description In December 2021, Recursion entered into a collaboration and license agreement with Roche and Genentech (collectively referred to as Roche). Recursion is constructing, using the Company’s imaging technology and proprietary machine-learning algorithms, unique maps of the inferred relationships amongst perturbation phenotypes in a given cellular context with the goal to discover and develop therapeutic small molecule programs in 181 Table of Contents a gastrointestinal cancer indication and in key areas of neuroscience. Roche and Recursion will collaborate to select certain novel inferences with respect to small molecules or targets generated from the Phenomaps for further validation and optimization as collaboration programs. Roche and Recursion may also combine sequencing datasets from Roche with Recursion’s Phenomaps and collaborate to generate new algorithms to produce multi-modal maps from which additional collaboration programs may be initiated. For every collaboration program that successfully identifies potential therapeutic small molecules or validates a target, Roche will have an option to obtain an exclusive license to develop and commercialize such potential therapeutic small molecules or to exploit such target in the applicable exclusive field. Pricing In January 2022, Recursion received a $ 150.0 million non-refundable upfront payment from the Company’s collaboration with Roche. In September 2024, Recursion received a $ 30.0 million milestone payment ( “acceptance fee 1”), which was an acceptance fee related to the first accepted neuroscience Phenomap. In October 2025, Recursion received another $ 30.0 million milestone payment (“acceptance fee 2”), which was an acceptance fee related to the second accepted neuroscience Phenomap. Recursion is eligible for additional milestone payments based on performance progress of the collaboration. Each of the Phenomaps requested by Roche and created by Recursion may be subject to either an initiation fee, acceptance fee or both. Such fees could exceed $ 250.0 million for 16 accepted Phenomaps. In addition, for a period of time after Roche’s acceptance of certain Phenomaps, Roche will have the option to obtain, subject to payment of an exercise fee, rights to use outside the collaboration the raw images generated in the course of creating those Phenomaps. If Roche exercises its external use option for all 12 eligible Phenomaps, Roche’s associated exercise fee payments to Recursion could exceed $ 250.0 million. Under the collaboration, Roche may initiate up to 40 programs, each of which, if successfully developed and commercialized, could yield more than $ 300.0 million in development, commercialization and net revenue milestones for Recursion, as well as tiered royalties on net revenue. Accounting This agreement represents a transaction with a customer and therefore is accounted for in accordance with ASC 606. Recursion has determined that it has three performance obligations, one related to gastrointestinal cancer and two in neuroscience. These performance obligations are for performing research and development services for Roche to identify targets and medicines. The performance obligations also include potential licenses related to the intellectual property. The Company concluded that licenses within the contract are not distinct from the research and development services as they are interrelated due to the fact that the research and development services significantly impact the potential licenses. Any additional services are considered customer options and will be considered as separate contracts for accounting purposes. The Company has determined the transaction price to be $ 210.0 million, comprised of the upfront payment and the acceptance fees. The consideration did not include the $ 30.0 million variable consideration for the first acceptance fee until the map was accepted, which was during the third quarter of 2024. As a result of Roche’s acceptance of the neuroscience Phenomap, Recursion is now recognizing the acceptance fee as part of the transaction price over the completion period of one of the neuroscience performance obligations. The consideration did not include the $ 30.0 million variable consideration for the second acceptance fee until the map was accepted, which was during the fourth quarter of 2025. As a result of Roche’s acceptance of the neuroscience Phenomap, Recursion is now recognizing the acceptance fee as part of the transaction price over the completion period of one of the neuroscience performance obligations. Recursion has fully constrained the remaining amounts of variable consideration to be received from potential milestones considering the stage of development and the risks associated with the remaining development required to achieve each milestone. Recursion will re-evaluate the transaction price each reporting period. The transaction price was generally allocated to the performance obligations based on the estimated relative stand-alone selling price of each performance obligation as determined using an expected cost plus margin approach. The acceptance fees were each allocated to one of the neuroscience performance obligations as the terms of the variable consideration related specifically to Recursion’s efforts to satisfy these performance obligations. The Company recognizes revenue over time based on costs incurred relative to total expected costs to perform the research and development services. Recursion determined that this method provides a faithful depiction of the transfer of control to the customer. This method of recognizing revenue requires the Company to make estimates of total costs to provide the services required under the performance obligations. Significant inputs used to determine the total costs included the length of time required, service hours performed by Company employees and materials 182 Table of Contents costs. A significant change in these estimates could have a material effect on the timing and amount of revenue recognized in future periods. Recursion has estimated the completion of the performance obligations by 2027. Additional Revenue Disclosures Revenue from two customers exceeded 10% of total revenue, and those two customers represented substantially all of Recursion’s operating revenue during the year ended December 31, 2025. For the year ended December 31, 2024 , revenue from one customer exceeded 10% of total revenues and that one customer represented primarily all of Recursion’s operating revenue. For the year ended December 31, 2023, revenue from two customers exceeded 10% of total revenues and those two customers represented primarily all of Recursion’s operating revenue. Of the revenue recognized during the year ended December 31, 2025, $ 52.1 million was included in the unearned revenue balance as of December 31, 2024, and was related to the payments received by the Company for its collaborative development contracts. Of the revenue recognized during the year ended December 31, 2024, primarily all of it was included in the unearned revenue balance as of December 31, 2023. Revenue recognized during the year ended December 31, 2025 was from the upfront and variable consideration payments received from the related contracts, which decreased the aggregate unearned revenue recognized. As of December 31, 2025, the Company had $ 4.4 million of costs incurred to fulfill a contract on its Consolidated Balance Sheet within “Other Current Assets.” Unearned revenue was classified as short-term and long-term on the Consolidated Balance Sheets based on the Company’s estimate of revenue that will be recognized during the next twelve months. Note 10. Stock-Based Compensation In April 2021, the Board of Directors and the stockholders of the Company adopted the 2021 Equity Incentive Plan (the 2021 Plan). The Company may grant stock options, restricted stock units (RSUs), stock appreciation rights, restricted stock awards and other forms of stock-based compensation. As of December 31, 2025, 14.0 million shares of Class A common stock were available for grant in the 2021 plan. In 2024, the Board of Directors and the stockholders of the Company adopted the 2024 Inducement Equity Incentive Plan (the 2024 Plan) as part of the Exscientia acquisition. See Note 4, “Acquisitions” for additional information. As of December 31, 2025, 11.7 million shares of Class A common stock were available for grant in the 2024 plan. The following table presents the classification of stock-based compensation expense for employees and non-employees within the Consolidated Statements of Operations: Years ended December 31, (in thousands) 2025 2024 2023 Cost of revenue $ 5,721 $ 3,636 $ 5,326 Research and development 61,646 36,184 21,992 General and administrative 42,651 39,681 24,361 Total $ 110,018 $ 79,501 $ 51,679 As part of the Exscientia acquisition, Recursion issued replacement grants for the Exscientia legacy awards. Recursion recorded $ 8.5 million of additional one-time stock compensation expense during the year ended December 31, 2024. See Note 4, “Acquisitions” for additional information on the Exscientia acquisition. 183 Table of Contents Stock Options Stock options are primarily granted to executive leaders at the Company, generally vest over four years and expire no later than 10 years from the date of grant. Stock option activity during the year ended December 31, 2025 was as follows: (in thousands except share and per share amounts) Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding as of December 31, 2024 21,941,495 $ 5.40 7.9 $ 62,685 Granted 3,510,673 6.98 Cancelled ( 3,056,772 ) 9.16 Exercised ( 5,079,675 ) 1.03 26,874 Outstanding as of December 31, 2025 17,315,721 $ 6.53 7.3 $ 13,713 Exercisable as of December 31, 2025 10,053,299 $ 6.53 6.3 $ 10,431 As part of the Exscientia acquisition, Recursion granted 5.8 million stock option awards related to the Exscientia legacy awards in 2024. The fair value of options granted to employees is calculated on the grant date using the Black-Scholes option valuation model. The weighted-average grant-date fair values of stock options granted during the years ended December 31, 2025, 2024 and 2023 were $ 4.42 , $ 5.64 and $ 5.64 , respectively. The following weighted-average assumptions were used to calculate the grant-date fair value of stock options: Years ended December 31, 2025 2024 2023 Expected term (in years) 6.2 4.0 5.8 Expected volatility 65 % 65 % 66 % Expected dividend yield — — — Risk-free interest rate 4.4 % 4.3 % 3.6 % As of December 31, 2025, $ 31.8 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next two years . RSUs Equity awards granted to employees primarily consist of RSUs and generally vest over four years . The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Recursion’s common stock on the date of grant. The following table summarizes Recursion’s RSU activity during the year ended December 31, 2025: Stock units Weighted-average grant date fair value Outstanding as of December 31, 2024 27,304,229 $ 7.47 Granted 15,706,685 5.84 Vested ( 9,600,592 ) 7.42 Forfeited ( 5,920,397 ) 7.48 Outstanding as of December 31, 2025 27,489,925 $ 6.55 184 Table of Contents As part of the Exscientia acquisition, Recursion granted 1.6 million RSU awards related to the Exscientia legacy awards in 2024. Additionally, Recursion granted 8.0 million RSU awards as part of a retention program for Exscientia employees in 2024. The fair market value of RSUs vested was $ 71.2 million during the year ended December 31, 2025. As of December 31, 2025, $ 167.6 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next three years . Note 11. Employee benefit plans The Company maintains defined contribution benefit plans for its eligible employees. The plans generally allow employees to make contributions up to a specified percentage of their compensation. The Company generally contributes between 4 % to 5 % of employee base salary, by matching 100 % of the first 4 % to 5 % of annual base salary contributed by each employee. Employer expenses were $ 5.8 million, $ 5.3 million and $ 3.8 million during the years ended December 31, 2025, 2024 and 2023, respectively. Note 12. Income Taxes The loss from continuing operations before income tax benefit is disaggregated as follows: Years ended December 31, (in thousands) 2025 2024 2023 Loss from continuing operations before income tax benefit United States ( 537,644 ) ( 422,851 ) ( 314,372 ) Foreign ( 107,251 ) ( 41,937 ) ( 17,756 ) Total loss from continuing operations before income tax benefit $ ( 644,895 ) $ ( 464,788 ) $ ( 332,128 ) The provision for income taxes consisted of the following components: Years ended December 31, (in thousands) 2025 2024 2023 Current Federal $ ( 237 ) $ ( 24 ) $ — State ( 6 ) — Foreign 5 ( 474 ) — Total current tax benefit (expense) $ ( 232 ) $ ( 504 ) $ — Deferred Federal $ 127,351 $ 80,110 $ 82,707 State 10,705 11,918 54,634 Foreign 55,686 9,921 4,564 Change in valuation allowance ( 193,374 ) ( 100,318 ) ( 137,843 ) Total deferred benefit $ 368 $ 1,631 $ 4,062 Total income tax benefit $ 136 $ 1,127 $ 4,062 The benefit for income taxes results in effective rates that differ from the statutory rates. The following is a reconciliation of income tax benefit computed at the statutory federal income tax rate to the total tax benefit computed at the effective tax rate: 185 Table of Contents Year ended December 31, 2025 (in thousands) Percent Amount U.S. federal statutory tax rate 21.0 % $ 135,428 State and local income taxes, net of federal income tax effects A 0.3 % ( 203 ) Foreign tax effects UK Change in valuation allowance ( 8.4 ) % ( 50,648 ) Gain on Exscientia GmbH sale 1.2 % 7,593 Statutory tax rate difference between UK and US 1.0 % 6,682 Share-based compensation 1.0 % 6,730 Other 1.2 % 7,763 Austria Loss on Exscientia GmbH sale ( 1 ) % ( 9,210 ) Other 0.0 % ( 20 ) Nontaxable or nondeductible items Share-based compensation ( 1.2 ) % ( 7,847 ) Other ( 0.1 ) % ( 534 ) Effect of cross-border tax laws ( 0.9 ) % ( 6,104 ) Tax credits R&D credit - current year generation 3.9 % 25,219 Orphan drug credit - current year generation 3.2 % 20,750 Change in valuation allowance ( 19.8 ) % ( 127,401 ) Changes in unrecognized tax benefits ( 0.7 ) % ( 4,597 ) Other adjustments ( 0.5 ) % ( 3,465 ) Effective tax rate 0.2 % $ 136 A State taxes in California and Utah made up the majority (greater than 50%) of the tax effect in this category. 186 Table of Contents Significant components of deferred tax assets and liabilities were as follows: December 31, (in thousands) 2025 2024 Deferred tax assets Net operating loss carryforwards $ 445,440 $ 274,421 Research and development capitalization 118,160 134,363 Tax credit carryforwards 117,738 68,811 Unearned revenue 6,020 19,219 Lease liabilities 17,622 23,510 Reserves and accruals 4,093 5,133 Stock-based compensation 10,015 14,730 Other 508 1,175 Gross deferred tax assets 719,596 541,362 Valuation allowance ( 665,371 ) ( 466,147 ) Net deferred tax asset 54,225 75,215 Deferred tax liabilities Right-of-use assets ( 14,177 ) ( 19,183 ) Definite lived intangibles ( 56,303 ) ( 67,140 ) Depreciable assets ( 7,000 ) ( 5,358 ) Deferred tax liabilities ( 77,480 ) ( 91,681 ) Net deferred tax liability $ ( 23,255 ) $ ( 16,466 ) The company paid the following income taxes (net of refunds received) during the year: December 31, (in thousands) 2025 2024 Federal $ 237 $ — Total income taxes paid (net of refunds received) $ 237 — Reserves for uncertain tax positions against the credit carryforwards were as follows: December 31, (in thousands) 2025 2024 Balance at the beginning of the period $ 6,749 $ 5,417 Increases for positions taken in current year 3,306 1,535 Increase (decrease) for positions taken in prior year 1,748 ( 203 ) Balance at the end of the period $ 11,803 $ 6,749 As of December 31, 2025, the Company had federal NOL carryforwards of $ 1.1 billion available to reduce taxable income, of which $ 16.3 million expire beginning with 2037 and $ 1.1 billion do not expire. The Company had state NOL carryforwards of $ 894.4 million available to reduce future state taxable income, of which $ 472.8 million expire beginning with 2031 and $ 421.6 million that begin to expire in 2032.The Company had foreign NOL carryforwards of $ 174.8 million available to reduce future foreign taxable income, of which $ 20.6 million expire beginning with 2032 and $ 154.3 million that do not expire. As of December 31, 2025, the Company also had federal and state research and development credit carryforwards of $ 60.3 million and $ 16.7 million respectively. As of December 31, 2024, the Company also had federal and state research and development credit carryforwards of $ 35.1 million and $ 10.2 million respectively. The Company also had federal Orphan Drug credits of $ 45.5 million and $ 24.7 million as of December 31, 2025 and December 31, 2024, respectively, which will begin expiring in 2036. The Company had reserves for uncertain tax positions against these credit carryforwards of $ 11.8 million and $ 6.7 million as of December 31, 2025 and December 31, 2024, respectively. 187 Table of Contents The Company files income tax returns in the United States (federal and various state jurisdictions), Canada, and the United Kingdom. The Company is subject to examination by taxing authorities in these jurisdictions. In the normal course of business, the Company may be subject to audits by tax authorities regarding the timing and amount of taxable income and deductions and the allocation of income among jurisdictions. The Company is not currently under examination in any of these jurisdictions. The Company is subject to income tax examinations on all federal returns since the 2016 tax return. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against deferred tax assets and evaluating the Company’s uncertain tax positions. Due to net losses since inception and the uncertainty of realizing certain deferred tax assets, the Company records valuation allowances when it is not more-likely-than-not that such deferred tax assets will be realized. Exscientia, Inc., a separate filing wholly owned subsidiary, is a tax paying entity with no history of cumulative losses. Therefore, no valuation allowance has been placed on this entity as of December 31, 2025. If, in a future period, the Company concludes it is more-likely-than-not that additional deferred tax assets will be realized, the Company may release all, or a portion of, the valuation allowance, which would increase net deferred tax assets (or reduce net deferred tax liabilities) and decrease income tax expense in the period such release is recorded. As of December 31, 2025 and 2024, the Company’s valuation allowance was $ 665.4 million and $ 466.1 million, respectively, which increased by approximately $ 199.2 million and $ 161.5 million during the years ended December 31, 2025 and 2024, respectively. Net operating losses (NOLs) and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subject to annual limitation due to ownership changes that occur under Section 382 of the Internal Revenue Code, as amended and similar state provisions. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. As of December 31, 2025, the Company conducted a Section 382 study through January 31, 2025 and concluded that a deemed ownership change occurred on September 25, 2017. As a result, the Company’s ability to utilize its NOLs and other tax attributes may be limited. The Company will continue to monitor ownership changes for any potential future limitations on its tax attributes. The OECD released a framework, referred to as Pillar Two, to implement a global minimum corporate tax rate of 15% on certain multinational enterprises. Certain countries have enacted legislation to adopt the Pillar Two framework while several countries are considering or still announcing changes to their tax laws to implement the minimum tax directive. While we do not currently expect Pillar Two to have a material impact on our effective tax rate, our analysis will continue as the OECD continues to release additional guidance and countries implement legislation. Note 13. Net Loss Per Share For the years ended December 31, 2025, 2024 and 2023, Recursion calculated net loss per share of Class A, Class B and Exchangeable common stock. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities consist of stock options and other contingently issuable shares. For periods presented in which the Company reports a net loss, all potentially dilutive shares are anti-dilutive and as such are excluded from the calculation. For the years ended December 31, 2025, 2024 and 2023, the Company reported a net loss and therefore basic and diluted loss per share were the same. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A, Class B and the Exchangeable common stock are identical, except with respect to voting. As a result, the undistributed earnings for each period are allocated based on the contractual participation rights of the Class A, Class B common stock and the Exchangeable common stock as if the earnings for the period had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis and the resulting amount per share for Class A, Class B and Exchangeable common stock was the same during the years ended December 31, 2025, 2024 and 2023. 188 Table of Contents The following tables set forth the computation of basic and diluted net loss per share of Class A, Class B and Exchangeable common stock during 2025, 2024 and 2023: Years ended December 31, (in thousands, except share amounts ) 2025 2024 2023 Numerator: Net loss $ ( 644,759 ) $ ( 463,661 ) $ ( 328,066 ) Denominator: Weighted average common shares outstanding 447,446,109 274,207,146 207,853,702 Net loss per share, basic and diluted $ ( 1.44 ) $ ( 1.69 ) $ ( 1.58 ) The Company excluded the following potential common shares from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Years ended December 31, 2025 2024 2023 Stock based compensation 8,143,319 9,021,895 9,848,141 Tempus agreement 6,350,736 7,802,744 1,073,834 Contingent stock relating to RE Ventures I transaction 315,225 — — Total 14,809,280 16,824,639 10,921,975 Note 14. Fair Value Measurements The fair value hierarchy consists of the following three levels: • Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access; • Level 2 — Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; and • Level 3 — Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company's management about the assumptions market participants would use in pricing the asset or liability. The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis: Basis of fair value measurement (in thousands) December 31, 2025 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 72,627 $ 72,627 $ — $ — Money market funds 670,667 670,667 — — Restricted cash 10,627 10,627 — — Total $ 753,921 $ 753,921 $ — $ — 189 Table of Contents Basis of fair value measurement (in thousands) December 31, 2024 Level 1 Level 2 Level 3 Assets Cash and cash equivalents: Cash $ 198,050 $ 198,050 $ — $ — Money market funds 235,812 235,812 — — Bank deposits 160,487 160,487 — — Restricted cash 8,675 8,675 — — Total $ 603,024 $ 603,024 $ — $ — In addition to the financial instruments that are recognized at fair value on the Consolidated Balance Sheet, the Company has certain financial instruments that are recognized at amortized cost or some basis other than fair value. The carrying amount of these instruments are considered to be representative of their approximate fair values. The following tables summarize the Company’s financial instruments that are not measured at fair value: Book values Fair values (in thousands) December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Liabilities Notes payable and financing lease liabilities, current $ 9,091 $ 8,425 $ 9,091 $ 8,425 Notes payable and financing lease liabilities, non-current 9,564 19,022 9,564 19,022 Total liabilities $ 18,655 $ 27,447 $ 18,655 $ 27,447 Note 15. Segment Information Segment loss Recursion operates as a single operating segment that is managed on a consolidated basis. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s chief operating decision maker uses segment net loss to evaluate the performance of its segment, analyze financial trends, compare the budget to the actual operating results, and make resource allocation decisions. Segment net loss represents the Company’s consolidated net loss. All corporate costs, global function support costs, overhead costs and other shared costs are included within this segment. Other segment items primarily include general and administrative expenses including facilities, information technology, professional fees (including auditing, tax and legal) and insurance. 190 Table of Contents The following table presents Recursion’s segment net loss: Years ended December 31, (In thousands) 2025 2024 2023 Revenue $ 74,681 $ 58,839 $ 44,575 Significant segment expenses Salaries 303,478 242,795 183,643 Consumables 102,905 77,543 65,688 Platform 49,209 15,876 6,353 Discovery 68,193 30,480 19,231 Clinical development 46,383 43,713 39,881 Depreciation and amortization 83,701 36,494 24,402 Other segment items 68,944 90,942 55,437 Loss from operations 648,132 479,004 350,060 Other non-operating income, net 3,237 14,216 17,932 Income tax benefit 136 1,127 4,062 Total segment loss $ 644,759 $ 463,661 $ 328,066 Supplemental asset information Total expenditures for additions to long-lived assets $ 6,469 $ 14,134 $ 14,393 Additional Segment Disclosures Recursion’s revenues are attributed to the following geographic areas based on the location the services are performed: Years ended December 31, (In thousands) 2025 2024 2023 United States $ 39,344 $ 57,377 $ 43,806 United Kingdom 35,337 1,135 — Other — 327 769 Total $ 74,681 $ 58,839 $ 44,575 Recursion’s long-lived assets are attributed to the following geographic areas based on their location: Years ended December 31, (In thousands) 2025 2024 2023 United States $ 61,075 $ 78,471 $ 84,056 United Kingdom 40,488 56,332 — Canada 2,368 2,631 2,454 Other — 3,629 — Total $ 103,931 $ 141,063 $ 86,510 The above long-lived assets table excludes balances relating to ROU assets of $ 65.5 million and $ 92.1 million for 2025 and 2024, respectively. The balances for 2025 and 2024 primarily related to the United States and United Kingdom. 191 Table of Contents Recursion generates revenue primarily from a single service, research and development services, therefore, the Company does not report additional information on revenue from external customers. Note 16. Subsequent Events In February 2026, the Company entered into a Sales Agreement (the “TD Cowen Sales Agreement”) with TD Securities (USA), LLC (the “TD Cowen Sales Agent”), to provide for the offering, issuance and sale of up to an aggregate amount of $ 300.0 million of its Class A common stock from time to time in “at-the-market” offerings (the TD Cowen ATM Offering). Recursion has not yet sold any shares and is not required to sell additional shares under the TD Cowen Sales Agreement. The Company pays the TD Cowen Sales Agent a commission of less than 3.0 % of the aggregate gross proceeds received from all sales of Class A common stock less certain agreed credits and reimbursements. The TD Cowen Sales Agreement continues until the earlier of selling all shares available under the TD Cowen Sales Agreement or terminated by written notice from either of the parties. 192 Table of Contents Item 9. Changes in and Disagreements with Accountants. None.