0001601830-23-000069 | 10-Q | XBRL Viewer | Recursion Pharmaceuticals INC

Supplemental Financial Information

9 Months Ended

Sep. 30, 2023

Supplemental Financial Information [Abstract]

Property and Equipment


	September 30,		December 31,
(in thousands)	2023		2022
Lab equipment	$	58,790	$	47,524
Leasehold improvements	45,791		41,872
Office equipment	22,098		20,164
Construction in progress	416		8,747
Property and equipment, gross	127,095		118,307
Less: Accumulated depreciation	(40,847)		(30,115)
Property and equipment, net	$	86,248	$	88,192

Depreciation expense on property and equipment was $4.2 million and $11.7 million during the three and nine months ended September 30, 2023, respectively, and $2.9 million and $8.3 million during the three and nine months ended September 30, 2022, respectively. The Company recorded an impairment of $1.2 million and $2.8 million during the nine months ended September 30, 2023 and 2022, respectively, related to construction projects for leasehold improvements as the Company no longer intended to use them. The impairments were recorded in “General and Administrative” in the Condensed Consolidated Statements of Operations.

For the nine months ended September 30, 2023, the Company initiated and completed a project to upgrade the BioHive supercomputer for $1.7 million. The supercomputer was classified as office equipment in the above table. The increase in lab equipment from the prior year was driven by the completion of several labs in the headquarters expansion. The majority of the balance was included in construction in progress in the prior year.

Accrued Expenses and Other Liabilities


	September 30,		December 31,
(in thousands)	2023		2022
Accrued compensation	$	22,231	$	20,433
Accrued development expenses	3,763		3,372
Accrued early discovery expenses	2,936		3,192
Materials received not invoiced	3,516		2,028
Accrued other expenses	7,360		3,879
Accrued expense and other liabilities	$	39,806	$	32,904

Notes Payable

In January 2023, the Company entered into a financing agreement for borrowing $1.9 million as part of the supercomputer upgrade project. The debt will be repaid over a three-year period at a 7% interest rate. As of September 30, 2023, the outstanding balance was $1.3 million.

In 2018, the Company borrowed $992 thousand, which was available as part of a lease agreement for use on tenant improvements. The note will be repaid over a 10-year period at an 8% interest rate. As of September 30, 2023, the outstanding balance was $561 thousand.

Interest Income, net


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Interest income	$	4,977	$	1,833	$	14,594	$	2,572
Interest expense	(25)		(13)		(71)		(42)
Interest income, net	$	4,952	$	1,820	$	14,523	$	2,530

For the three and nine months ended September 30, 2023 and 2022, interest income primarily related to earnings on cash and cash equivalents in money market funds. Interest income was included in “Other income, net” on the Condensed Consolidated Statements of Operations.

Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	$ 9,885	$ 9,200
Total assets	378,100	413,813
Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	368,215	404,613
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	9,885	9,200
Total assets	378,100	413,813
Level 1 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	368,215	404,613
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	0	0
Total assets	0	0
Level 2 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash	0	0
Total assets	0	0
Level 3 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	$ 0	$ 0

Commitments and Contingencies (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Loss contingency accrual	$ 0	$ 0

Acquisitions - Narrative (Details) - USD ($)				9 Months Ended
Acquisitions - Narrative (Details) - USD ($)	Sep. 30, 2023	May 25, 2023	May 16, 2023	Sep. 30, 2023
Valence Discovery Inc
Business Acquisition [Line Items]
Decrease in fair value of consideration transferred				$ 7,800,000
Decrease in value of goodwill				7,800,000
Net revenues			$ 0
Valence Discovery Inc \| Technology Intangible Assets
Business Acquisition [Line Items]
Useful life			4 years
Valence Discovery Inc \| Stock Options
Business Acquisition [Line Items]
Equity interest issued or issuable (in shares)			792,011
Valence Discovery Inc \| Class A
Business Acquisition [Line Items]
Equity interest issued or issuable (in shares)			2,168,020
Valence Discovery Inc \| Exchangeable Stock
Business Acquisition [Line Items]
Equity interest issued or issuable (in shares)			4,390,939
Cyclica Inc
Business Acquisition [Line Items]
Operating loss				$ 6,000,000
Cyclica Inc \| Technology Intangible Assets
Business Acquisition [Line Items]
Useful life		3 years
Cyclica Inc \| Stock Options
Business Acquisition [Line Items]
Equity interest issued or issuable (in shares)		1,000,873
Cyclica Inc \| Class A
Business Acquisition [Line Items]
Equity interest issued or issuable (in shares)	194,000	5,706,089

Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

The Company has entered into various long-term real estate leases primarily related to office, research and development and operating activities. The Company’s leases have remaining terms from under 1 year to 9 years and some of those leases include options that provide Recursion with the ability to extend the lease term for five years. The options are included in the lease term when it is reasonably certain that the option will be exercised.

For the nine months ended September 30, 2023, Recursion entered into lease modifications resulting in an increase to the right-of-use asset and lease liability of $3.4 million. The modifications had no impact to the Condensed Consolidated Statements of Operations.

In May 2022, the Company entered into a lease agreement for laboratory and office space in Toronto, Ontario with approximately 28,110 square feet (the “Toronto Lease”). This lease was separated into multiple lease components based on the intended use of the portions of the space. For some of those components, the right of use began May 2022 when the control of the assets was obtained. The right of use for the remaining component began June 2023 when the control of the asset was obtained. The Toronto Lease terms for each component are ten years with a five-year renewal option. The Toronto Lease includes provisions for escalating rent payments and a tenant improvement allowance of up to $1.6 million. Total fixed payments are expected to be approximately $11.1 million with additional variable expenses, including building expenses.

See Note 7, “Commitments and Contingencies” for information on the Industry lease.

The components of the lease cost are as follows:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease cost	$	2,024	$	2,017	$	6,042	$	5,801
Variable lease cost	532		102		1,689		772
Short-term lease cost	66		—		107		—
Lease cost	$	2,622	$	2,119	$	7,838	$	6,573

Lease term and discount rates as of September 30, 2023 were:


(in thousands)	September 30, 2023
Operating leases
Weighted-average remaining lease term (years)	6.9
Weighted-average discount rate	7.8	%

Maturities of operating lease liabilities as of September 30, 2023 were:


(in thousands)	Operating leases
Remainder of 2023	$	1,750
2024	10,005
2025	10,204
2026	10,332
2027	10,575
Thereafter	24,182
Total lease payments	67,048
Less: imputed interest	(17,393)
Present value of lease liabilities	$	49,655

Net Loss Per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Denominator:
Weighted average common shares outstanding, basic (in shares)	214,327,186	173,435,970	203,090,637	172,122,974
Weighted average common shares outstanding, diluted (in shares)	214,327,186	173,435,970	203,090,637	172,122,974
Net loss per share, basic (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Net loss per share, diluted (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Class A
Numerator:
Undistributed earnings, basic	$ (88,975)	$ (57,685)	$ (222,990)	$ (173,167)
Undistributed earnings, diluted	$ (88,975)	$ (57,685)	$ (222,990)	$ (173,167)
Denominator:
Weighted average common shares outstanding, basic (in shares)	205,013,368	165,518,152	192,653,702	163,783,626
Weighted average common shares outstanding, diluted (in shares)	205,013,368	165,518,152	192,653,702	163,783,626
Net loss per share, basic (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Net loss per share, diluted (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Class B
Numerator:
Undistributed earnings, basic	$ (3,313)	$ (2,759)	$ (8,911)	$ (8,817)
Undistributed earnings, diluted	$ (3,313)	$ (2,759)	$ (8,911)	$ (8,817)
Denominator:
Weighted average common shares outstanding, basic (in shares)	7,633,893	7,917,818	7,698,790	8,339,348
Weighted average common shares outstanding, diluted (in shares)	7,633,893	7,917,818	7,698,790	8,339,348
Net loss per share, basic (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Net loss per share, diluted (in dollars per shares)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Exchangeable
Numerator:
Undistributed earnings, basic	$ (729)		$ (3,169)
Undistributed earnings, diluted	$ (729)		$ (3,169)
Denominator:
Weighted average common shares outstanding, basic (in shares)	1,679,925		2,738,145
Weighted average common shares outstanding, diluted (in shares)	1,679,925		2,738,145
Net loss per share, basic (in dollars per shares)	$ (0.43)		$ (1.16)
Net loss per share, diluted (in dollars per shares)	$ (0.43)		$ (1.16)

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2022. It is management’s opinion that these condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial statements. Revenue and net loss for any interim period are not necessarily indicative of future or annual results. Recent Accounting Pronouncements New accounting pronouncements are routinely issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies and adopted by Recursion as of the specified effective date. The Company does not expect the impact of recently issued standards that are not yet effective will have a material impact on its condensed consolidated financial statements and disclosures.

Acquisitions - Summarizes Of Fair Value Of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2023	May 25, 2023	May 16, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 52,750			$ 801
Valence Discovery Inc
Business Acquisition [Line Items]
Cash			$ 4,235
Other receivables			485
Intangible assets - technology			15,000
Accounts payable and accrued liabilities			(872)
Deferred income taxes			(2,892)
Total identifiable net assets			15,956
Goodwill			19,983
Total assets acquired and liabilities assumed			$ 35,939
Cyclica Inc
Business Acquisition [Line Items]
Cash		$ 2,429
Restricted cash		1,685
Other receivables		736
Investments		1,000
Other current assets		385
Intangible assets - technology		28,000
Accounts payable and accrued liabilities		(579)
Unearned revenue		(1,754)
Deferred income taxes		(1,443)
Other liabilities, current		(66)
Other liabilities, non-current		(139)
Total identifiable net assets		30,254
Goodwill		31,965
Total assets acquired and liabilities assumed		$ 62,219

Condensed Consolidated Statements of Stockholders’ Equity (unaudited) - USD ($) $ in Thousands	Total	Common Stock (Class A, B and Exchangeable)	Additional Paid-in-Capital	Accumulated Deficit	Accumulated other comprehensive loss
Common stock, shares outstanding at beginning period (in shares) at Dec. 31, 2021		170,272,462
Total stockholders’ equity (deficit) at beginning of period at Dec. 31, 2021	$ 542,938	$ 2	$ 943,142	$ (400,080)	$ (126)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(181,984)			(181,984)
Other comprehensive gain (loss)	126				126
Stock option exercises and other (in shares)		3,800,444
Stock option exercises and other	6,740		6,740
Stock-based compensation	20,214		20,214
Common stock, shares outstanding at end period (in shares) at Sep. 30, 2022		174,072,906
Total stockholders’ equity (deficit) at end of period at Sep. 30, 2022	388,034	$ 2	970,096	(582,064)	0
Common stock, shares outstanding at beginning period (in shares) at Jun. 30, 2022		172,815,409
Total stockholders’ equity (deficit) at beginning of period at Jun. 30, 2022	437,579	$ 2	959,393	(521,619)	(197)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(60,445)			(60,445)
Other comprehensive gain (loss)	197				197
Stock option exercises and other (in shares)		1,257,497
Stock option exercises and other	1,794		1,794
Stock-based compensation	8,909		8,909
Common stock, shares outstanding at end period (in shares) at Sep. 30, 2022		174,072,906
Total stockholders’ equity (deficit) at end of period at Sep. 30, 2022	$ 388,034	$ 2	970,096	(582,064)	0
Common stock, shares outstanding at beginning period (in shares) at Dec. 31, 2022	191,022,864	191,022,864
Total stockholders’ equity (deficit) at beginning of period at Dec. 31, 2022	$ 485,806	$ 2	1,125,360	(639,556)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(235,070)			(235,070)
Other comprehensive gain (loss)	$ 0
Stock option exercises and other (in shares)	3,547,071	6,417,024
Stock option exercises and other	$ 8,789		8,789
Stock-based compensation	37,417		37,417
Common stock issuance for private placement, net of issuance costs (in shares)		7,706,363
Common stock issuance for private placement, net of issuance costs	50,000		50,000
Class A shares and stock options issued for acquisitions (in shares)		7,437,258
Class A shares and stock options issued for acquisitions	68,499		68,499
Exchangeable shares issued for acquisitions (in shares)		3,730,173
Exchangeable shares issued for acquisitions	$ 22,526		22,526
Class A shares issued for exchangeable shares		3,148,938
Exchangeable shares redeemed (in shares)		(3,148,938)
Common stock, shares outstanding at end period (in shares) at Sep. 30, 2023	216,313,682	216,313,682
Total stockholders’ equity (deficit) at end of period at Sep. 30, 2023	$ 437,967	$ 2	1,312,591	(874,626)	0
Common stock, shares outstanding at beginning period (in shares) at Jun. 30, 2023		206,737,332
Total stockholders’ equity (deficit) at beginning of period at Jun. 30, 2023	468,963	$ 2	1,250,570	(781,609)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(93,017)			(93,017)
Other comprehensive gain (loss)	0
Stock option exercises and other (in shares)		2,814,903
Stock option exercises and other	2,995		2,995
Stock-based compensation	16,792		16,792
Common stock issuance for private placement, net of issuance costs (in shares)		7,706,363
Common stock issuance for private placement, net of issuance costs	50,000		50,000
Class A shares and stock options issued for acquisitions (in shares)		558,605
Exchangeable shares issued for acquisitions (in shares)		(1,503,521)
Exchangeable shares issued for acquisitions	$ (7,766)		(7,766)
Class A shares issued for exchangeable shares		1,921,693
Exchangeable shares redeemed (in shares)		(1,921,693)
Common stock, shares outstanding at end period (in shares) at Sep. 30, 2023	216,313,682	216,313,682
Total stockholders’ equity (deficit) at end of period at Sep. 30, 2023	$ 437,967	$ 2	$ 1,312,591	$ (874,626)	$ 0

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 0	$ 0	$ 0	$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Acquisitions

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

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.

Valence Discovery Inc.

On May 16, 2023, Recursion acquired all of the outstanding equity interests in Valence Discovery Inc. (Valence), a privately-held machine learning (ML) / artificial intelligence (AI) digital chemistry company. The integration of Valence’s AI-based chemistry engine into Recursion’s operating system will allow Recursion to expand its technology-enabled drug discovery process. This will accelerate Recursion’s digital chemistry capabilities and its drug discovery process.

The acquisition of Valence was accounted for as a business combination using the acquisition method of accounting. The aggregate upfront consideration for the acquisition of Valence consisted of 2,168,020 shares of Recursion Class A common stock, 4,390,939 shares of a subsidiary of Recursion, exchangeable for shares of Recursion’s Class A common stock, 792,011 shares issuable upon exercise of stock options held by Valence equity award holders and deferred liabilities for additional consideration. An insignificant number of the aforementioned shares of consideration had not yet been issued as of September 30, 2023.The final number of shares to be issued has not yet been finalized and so are subject to change.

The following table summarizes total consideration:


(in thousands)
Fair value of Recursion Class A common stock	$	11,122
Fair value of Exchangeable stock	22,526
Fair value of equity awards issued to Valance equity award holders	1,933
Deferred liabilities for additional consideration	358
Total consideration	$	35,939

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:


(in thousands)
Cash	$	4,235
Other receivables	485
Intangible asset - technology	15,000
Accounts payable and accrued liabilities	(872)
Deferred income taxes	(2,892)
Total identifiable net assets	$	15,956
Goodwill	19,983
Total assets acquired and liabilities assumed	$	35,939

The intangible asset related to Valence’s ML and AI digital chemistry platform. The estimated fair value of the intangible asset was determined using a cost approach. This valuation technique provides the fair value of an asset based on estimates of the total costs to develop the technology. Significant inputs used to determine the total cost includes the length of time required and service hours performed by Company employees. The technology intangible asset is being amortized on a straight-line basis over its four-year useful life.

Goodwill was calculated as the excess of the consideration transferred over the net assets recognized. The goodwill recognized represents the assembled workforce and expected synergies, including the ability to: (i) leverage Valence’s digital chemistry platform across Recursion’s business; (ii) leverage Valence’s ML and AI capabilities; (iii) integrate Recursion’s data and operating system into Valence’s platform; and (iv) accelerate Recursion’s pipeline. Goodwill was also impacted by the establishment of a deferred tax liability for the acquired identifiable intangible assets which have no tax basis. The goodwill is not deductible for tax purposes.

Subsequent to the acquisition date, the Company made certain adjustments to decrease the fair value of consideration transferred by $7.8 million, which also resulted in a decrease to goodwill of $7.8 million. These adjustments have been reflected in the tables above. The Company made these adjustments to reflect facts and circumstances that existed as of the acquisition date and did not result from intervening events subsequent to such date. These adjustments did not have a material impact on Recursion's results of operations.

Recursion’s condensed consolidated statement of operations included no net revenue and an immaterial operating loss associated with Valence’s operations. As the acquisition occurred in May 2023, the Company is still finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed. The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change. The primary areas subject to change relate to the valuation of the intangible asset, other receivables and deferred taxes. To assist management in the allocation, the Company engaged external specialists. The Company will finalize the amounts recognized as the information necessary to complete the analysis is obtained. The Company expects to finalize these amounts as soon as possible but no later than one year from the acquisition date.

Cyclica Inc.

On May 25, 2023, Recursion acquired all of the outstanding equity interests in Cyclica Inc. (Cyclica), a privately-held Company that has built a digital chemistry software suite which enables mechanism of action deconvolution and generative chemistry suggestions based on desired targets. Cyclica’s platform is expected to enhance the optimization of Recursion’s compounds for efficacy while minimizing liabilities through generative machine learning approaches.

The acquisition of Cyclica was accounted for as a business combination using the acquisition method of accounting. The aggregate upfront consideration for the acquisition of Cyclica consisted of 5,706,089 shares of Recursion Class A common stock, cash payments, 1,000,873 shares issuable upon exercise of stock options held by Cyclica equity award holders and deferred liabilities for additional consideration. Approximately 194 thousand of the aforementioned shares of Class A common stock consideration had not yet been issued as of September 30, 2023.

The following table summarizes total consideration:


(in thousands)
Fair value of Recursion Class A common stock	$	49,415
Cash	6,434
Fair value of equity awards issued to Cyclica equity award holders	6,030
Deferred liabilities for additional consideration	341
Total consideration	$	62,220

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:


(in thousands)
Cash	$	2,429
Restricted cash	1,685
Other receivables	736
Investments	1,000
Other current assets	385
Intangible assets - technology	28,000
Accounts payable and accrued liabilities	(579)
Unearned revenue	(1,754)
Deferred income taxes	(1,443)
Other liabilities, current	(66)
Other liabilities, non-current	(139)
Total identifiable net assets	$	30,254
Goodwill	31,965
Total assets acquired and liabilities assumed	$	62,219

The intangible assets are related to Cyclica’s digital chemistry platforms. The estimated fair value of the intangible assets were determined using a cost approach. This valuation technique provides the fair value of an asset based on estimates of the total costs to develop the technology. Significant inputs used to determine the total cost includes the length of time required and service hours performed by Company employees. The technology intangible assets are being amortized on a straight-line basis over their three-year useful lives.

Goodwill was calculated as the excess of the consideration transferred over the net assets recognized. The goodwill recognized represents the assembled workforce and expected synergies, including the ability to: (i) leverage Cyclica’s digital chemistry platform across Recursion’s business; (ii) leverage Cyclica’s ML and AI capabilities; (iii) integrate Recursion’s data and operating system into Cyclica’s platform; and (iv) accelerate Recursion’s pipeline. Goodwill was also impacted by the establishment of a deferred tax liability for the acquired identifiable intangible assets. The goodwill is not deductible for tax purposes.

Recursion’s condensed consolidated statement of operations for the nine months ended September 30, 2023 included immaterial net revenue and a $6.0 million operating loss associated with Cyclica’s operations. As the acquisition occurred in May 2023, the Company is still finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed. The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change. The primary areas subject to change relate to the valuation of the intangible assets, other receivables and deferred taxes. To assist management in the allocation, the Company engaged external specialists. The Company will finalize the amounts recognized as the information necessary to complete the analysis is obtained. The Company expects to finalize these amounts as soon as possible but no later than one year from the acquisition date.

Pro forma financial information

The following table presents the unaudited pro forma combined results of operations of Recursion, Valence and Cyclica as if the acquisitions had occurred on January 1, 2022:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Net revenue	$	10,534	$	13,478	$	33,970	$	26,942
Net loss	(92,553)		(66,836)		(245,391)		(207,131)

The unaudited pro forma financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Recursion, Valence and Cyclica. In order to reflect the occurrence of the acquisition on January 1, 2022 as required, the unaudited pro forma financial information includes adjustments to reflect the incremental amortization expense to be incurred based on the fair values of the identifiable intangible assets acquired, the additional stock compensation expense associated with the issuance of equity compensation related to the acquisitions and the reclassification of acquisition costs incurred during the nine months ended September 30, 2023 to the nine months ended September 30, 2022. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2022. In addition, the unaudited pro forma financial information is not a projection of the future results of operations of the combined company nor does it reflect the expected realization of any cost savings or synergies associated with the acquisition.

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill:


(in thousands)
Balance as of December 31, 2022	$	801
Additions from acquisitions	51,949
Balance as of September 30, 2023	$	52,750

The additions to goodwill relate to the acquisition of Cyclica and Valence during the nine months ended September 30, 2023. See Note 4, “Acquisitions” for additional details. No goodwill impairment was recorded during the three and nine months ended September 30, 2023 and 2022.

Intangible Assets, Net

The following table summarizes intangible assets:


	September 30, 2023						December 31, 2022
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible assets	$	44,376	$	(5,903)	$	38,473	$	1,211	$	(809)	$	402
Indefinite-lived intangible asset	986		—		986		904		—		904
Intangible assets, net	$	45,362	$	(5,903)	$	39,459	$	2,115	$	(809)	$	1,306

The definite-lived intangible assets balance increased during the nine months ended September 30, 2023 due to the Company’s acquisitions. See Note 4, “Acquisitions” for additional details on the intangible assets acquired.

Amortization expense was $3.4 million and $5.1 million during the three and nine months ended September 30, 2023, respectively. Amortization expense was $76 thousand and $228 thousand during the three and nine months ended September 30, 2022, respectively. Amortization expense was included in research and development in the Condensed Consolidated Statements of Operations. No indefinite-lived intangible asset impairment charges were recorded during the three and nine months ended September 30, 2023 and 2022.

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, shares authorized (in shares)	2,000,000,000	2,000,000,000
Common stock, shares issued (in shares)	216,313,682	191,022,864
Common sock, shares outstanding (in shares)	216,313,682	191,022,864
Class A
Common stock, shares authorized (in shares)	1,989,032,117	1,989,032,117
Common stock, shares issued (in shares)	207,964,366	183,209,655
Common sock, shares outstanding (in shares)	207,964,366	183,209,655
Class B
Common stock, shares authorized (in shares)	10,967,883	10,967,883
Common stock, shares issued (in shares)	7,599,871	7,813,209
Common sock, shares outstanding (in shares)	7,599,871	7,813,209
Exchangeable Stock
Common stock, shares issued (in shares)	749,445	0
Common sock, shares outstanding (in shares)	749,445	0

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss per Share

The following tables set forth the computation of basic and diluted net loss per share of Class A, Class B and Exchangeable common stock:


	Three months ended						Nine months ended
	September 30, 2023						September 30, 2023
(in thousands, except share amount)	Class A		Class B		Exchangeable		Class A		Class B		Exchangeable
Numerator:
Allocation of undistributed earnings	$	(88,975)	$	(3,313)	$	(729)	$	(222,990)	$	(8,911)	$	(3,169)
Denominator:
Weighted average common shares outstanding	205,013,368		7,633,893		1,679,925		192,653,702		7,698,790		2,738,145
Net loss per share, basic and diluted	$	(0.43)	$	(0.43)	$	(0.43)	$	(1.16)	$	(1.16)	$	(1.16)


	Three months ended				Nine months ended
	September 30, 2022				September 30, 2022
(in thousands, except share amounts)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(57,685)	$	(2,759)	$	(173,167)	$	(8,817)
Denominator:
Weighted average common shares outstanding	165,518,152		7,917,818		163,783,626		8,339,348
Net loss per share, basic and diluted	$	(0.35)	$	(0.35)	$	(1.06)	$	(1.06)

Schedule of Antidilutive Securities Excluded from Computation of Net Loss per Share

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:


	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Stock based compensation	12,162,449	12,570,320	9,022,502	10,849,853

Supplemental Financial Information - PPE (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 127,095	$ 118,307
Less: Accumulated depreciation	(40,847)	(30,115)
Property and equipment, net	86,248	88,192
Lab equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	58,790	47,524
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	45,791	41,872
Office equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	22,098	20,164
Construction in progress
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 416	$ 8,747

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (235,070)	$ (181,984)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	16,849	8,542
Stock-based compensation	37,417	20,214
Fixed asset impairment	1,188	2,806
Lease expense	6,014	5,747
Other, net	(1,114)	377
Changes in operating assets and liabilities:
Other receivables and assets	(1,334)	(5,574)
Unearned revenue	(33,360)	123,995
Accounts payable	(670)	1,072
Accrued development expense	391	3,696
Accrued expenses and other current liabilities	3,936	(12,740)
Operating lease liabilities	(7,950)	(4,927)
Net cash used in operating activities	(213,703)	(38,776)
Cash flows from investing activities
Net cash and restricted cash acquired in the acquisition of a business	1,915	0
Purchases of property and equipment	(9,888)	(29,080)
Purchase of an intangible asset	(247)	(300)
Sales and maturities of investments	480	230,608
Net cash provided by (used in) investing activities	(7,740)	201,228
Cash flows from financing activities
Proceeds from private placement of stock	50,000	0
Proceeds from equity incentive plans	9,546	7,156
Repayment of long-term debt	(72)	(67)
Net cash provided by financing activities	59,474	7,089
Effect of exchange rate changes on cash, cash equivalents and restricted cash	64	0
Net change in cash, cash equivalents and restricted cash	(161,905)	169,541
Cash, cash equivalents and restricted cash, beginning of period	559,112	295,349
Cash, cash equivalents and restricted cash, end of period	397,207	464,890
Supplemental schedule of non-cash investing and financing activities
Issuance of shares for the acquisitions of businesses	91,025	0
Accrued property and equipment	0	3,093
Right-of-use asset additions and modifications	4,324	3,950
Financed equipment purchase	1,214	0
Supplemental schedule of cash flow information
Cash paid for operating leases	7,950	4,927
Cash paid for interest	$ 36	$ 42

Collaborative Development Contracts	9 Months Ended
Collaborative Development Contracts	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Collaborative Development Contracts	Collaborative Development Contracts 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 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. 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 Accounting Standards Codification (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 $150.0 million, comprised of the upfront payment. Recursion will fully constrain the 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 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 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 has estimated the completion of the performance obligations by 2025. Bayer AG Description In August 2020, the Company entered into a Research Collaboration and Option Agreement (the Bayer Agreement) with Bayer AG (Bayer) for a five-year term pursuant to which the Company and Bayer may initiate approximately 10 research projects related to fibrosis across multiple organ systems, including the lung, liver and heart. Under the agreement, the Company contributed compounds from its proprietary library and Bayer contributed compounds from its proprietary library and will contribute scientific expertise throughout the collaboration. Under each research project, the Company will work with Bayer to identify potential candidates for development. Under the agreement, Bayer has the first option for licenses to potential candidates. Pricing In October 2020, the Company received a $30.0 million non-refundable upfront payment. Each such license could potentially result in option exercise fees and development and commercial milestone payments payable to the Company, with an aggregate value of up to approximately $100.0 million (for an option on a lead series) or up to approximately $120.0 million (for an option on a development candidate), as well as tiered royalties for each such license, ranging from low- to mid-single digit percentages of sales, depending on commercial success. Accounting The Company determined that it has one performance obligation under the agreement, which is to perform research and development services for Bayer. Recursion determined the transaction price to be $30.0 million, comprised of the upfront payment. The Company allocated the amount to the single performance obligation. The Company is recognizing revenue over time by measuring progress towards completion of the performance obligation. This method of recognizing revenue requires the Company to make estimates of the total time to provide the services required under the performance obligation. 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 obligation by 2023. Additional Revenue Disclosures Recursion recognized $10.1 million and $33.3 million of operating revenue during the three and nine months ended September 30, 2023, respectively, primarily all of which was included in the unearned revenue balance as of December 31, 2022. Of the revenue recognized during the three and nine months ended September 30, 2022, $2.5 million and $7.5 million, respectively, were included in the unearned revenue balance as of December 31, 2021. Revenue recognized was from upfront payments received at the inception of the related contracts, which decreased the initial unearned revenue recognized. As of September 30, 2023, the Company had $7.9 million of costs incurred to fulfill a contract on its Condensed Consolidated Balance Sheet within “Other current assets.” Unearned revenue was classified as short-term and long-term on the Condensed Consolidated Balance Sheets based on the Company’s estimate of revenue that will be recognized during the next twelve months.

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

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)	September 30, 2023		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	368,215	$	368,215	$	—	$	—
Restricted cash	9,885		9,885		—		—
Total assets	$	378,100	$	378,100	$	—	$	—


			Basis of fair value measurement
(in thousands)	December 31, 2022		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	404,613	$	404,613	$	—	$	—
Restricted cash	9,200		9,200		—		—
Total assets	$	413,813	$	413,813	$	—	$	—

Schedule of Fair Value Disclosure of Asset and Liability Not Measured at Fair Value

The following tables summarize the Company’s financial instruments that are not measured at fair value:


	Book values				Fair values
(in thousands)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Liabilities
Current portion of notes payable	$	695	$	97	$	695	$	97
Notes payable, net of current portion	1,126		536		1,126		536
Total liabilities	$	1,821	$	633	$	1,821	$	633

Supplemental Financial Information - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Depreciation		$ 4,200	$ 2,900	$ 11,700	$ 8,300
Fixed asset impairment				1,188	2,806
Purchases of property and equipment				9,888	29,080
Notes payable
Property, Plant and Equipment [Line Items]
Proceeds from issuance of long-term debt	$ 1,900
Debt instrument, term	3 years
Debt Instrument, interest rate (as percent)	7.00%
Notes payable		1,300		1,300
Notes payable \| Station 41 lease
Property, Plant and Equipment [Line Items]
Proceeds from issuance of long-term debt						$ 992
Debt instrument, term						10 years
Debt Instrument, interest rate (as percent)						8.00%
Notes payable		$ 561		561
Leasehold improvements
Property, Plant and Equipment [Line Items]
Fixed asset impairment				1,200	$ 2,800
BioHive Supercomputer
Property, Plant and Equipment [Line Items]
Purchases of property and equipment				$ 1,700

Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2023	Oct. 31, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40323
Entity Registrant Name	RECURSION PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4099738
Entity Address, Address Line One	41 S Rio Grande Street
Entity Address, City or Town	Salt Lake City,
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84101
City Area Code	385
Local Phone Number	269 - 0203
Title of 12(b) Security	Class A Common Stock, par value $0.00001
Trading Symbol	RXRX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001601830
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		208,283,925
Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		7,589,871
Exchangeable Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		749,445

Insider Trading Arrangements	3 Months Ended	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2023 shares	Sep. 30, 2023 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Blake Borgeson [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On August 18, 2023, Blake Borgeson, a member of our Board of Directors, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 745,186 shares of the Company’s Class A common stock until November 12, 2024.
Name	Blake Borgeson
Title	member of our Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 18, 2023
Arrangement Duration	452 days
Aggregate Available	745,186	745,186
Dean Li [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On August 24, 2023, Dean Li, a member of the Board of Directors, and his affiliates, adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 155,500 shares of the Company’s Class A common stock until November 20, 2024.
Name	Dean Li,
Title	member of the Board of Directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 24, 2023
Arrangement Duration	454 days
Aggregate Available	155,500	155,500

Acquisitions - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) $ in Thousands	May 25, 2023	May 16, 2023
Valence Discovery Inc
Business Acquisition [Line Items]
Deferred liabilities for additional consideration		$ 358
Total consideration		35,939
Valence Discovery Inc \| Employee stock
Business Acquisition [Line Items]
Fair value of equity interests issued, value		1,933
Valence Discovery Inc \| Class A
Business Acquisition [Line Items]
Fair value of equity interests issued, value		11,122
Valence Discovery Inc \| Exchangeable Stock
Business Acquisition [Line Items]
Fair value of equity interests issued, value		$ 22,526
Cyclica Inc
Business Acquisition [Line Items]
Cash	$ 6,434
Deferred liabilities for additional consideration	341
Total consideration	62,220
Cyclica Inc \| Employee stock
Business Acquisition [Line Items]
Fair value of equity interests issued, value	6,030
Cyclica Inc \| Class A
Business Acquisition [Line Items]
Fair value of equity interests issued, value	$ 49,415

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

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). Under the 2021 Plan, 16,186,000 shares of Class A common stock were reserved. Additionally, shares were reserved for all outstanding awards under the previous 2016 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 September 30, 2023, 8,868,107 shares of Class A common stock were available for grant.

The following table presents the classification of stock-based compensation expense for employees and non-employees within the Condensed Consolidated Statements of Operations:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Cost of revenue	$	2,123	$	732	$	4,549	$	1,560
Research and development	6,579		3,674		13,590		7,404
General and administrative	7,640		4,247		17,861		10,534
Total	$	16,342	$	8,653	$	36,000	$	19,498

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 nine months ended September 30, 2023 was as follows:


(in thousands except share data)	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	16,154,924	$	5.10	7.5	$	67,997
Granted	5,083,268	6.23
Cancelled	(910,758)	8.54
Exercised	(3,547,071)	2.19			25,887
Outstanding as of September 30, 2023	16,780,363	$	5.90	7.2	$	55,896
Exercisable as of September 30, 2023	9,897,994	$	4.70	6.5	$	43,681

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 nine months ended September 30, 2023 and 2022 were $5.64 and $6.57, respectively.

The following weighted-average assumptions were used to calculate the grant-date fair value of stock options:


	Nine months ended September 30,
	2023		2022
Expected term (in years)	5.8		6.2
Expected volatility	66	%	63	%
Expected dividend yield	—		—
Risk-free interest rate	3.6	%	1.9	%

As of September 30, 2023, $39.6 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 nine months ended September 30, 2023:


	Stock units	Weighted-average grant date fair value
Outstanding as of December 31, 2022	6,894,525	$	8.17
Granted	13,950,469	8.65
Vested	(2,360,411)	4.03
Forfeited	(765,227)	8.27
Outstanding as of September 30, 2023	17,719,356	$	8.45

The fair market value of RSUs vested was $19.8 million during the nine months ended September 30, 2023. As of September 30, 2023, $141.4 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next four years.

Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

For the three and nine months ended September 30, 2023 and 2022, Recursion calculated net loss per share of Class A, Class B and Exchangeable common stock using the two-class method. 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 three and nine months ended September 30, 2023 and 2022, 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 Exchangeable common stock are substantially 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 and Exchangeable common shares 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 three and nine months ended September 30, 2023 and 2022.

The following tables set forth the computation of basic and diluted net loss per share of Class A, Class B and Exchangeable common stock:


	Three months ended						Nine months ended
	September 30, 2023						September 30, 2023
(in thousands, except share amount)	Class A		Class B		Exchangeable		Class A		Class B		Exchangeable
Numerator:
Allocation of undistributed earnings	$	(88,975)	$	(3,313)	$	(729)	$	(222,990)	$	(8,911)	$	(3,169)
Denominator:
Weighted average common shares outstanding	205,013,368		7,633,893		1,679,925		192,653,702		7,698,790		2,738,145
Net loss per share, basic and diluted	$	(0.43)	$	(0.43)	$	(0.43)	$	(1.16)	$	(1.16)	$	(1.16)


	Three months ended				Nine months ended
	September 30, 2022				September 30, 2022
(in thousands, except share amounts)	Class A		Class B		Class A		Class B
Numerator:
Allocation of undistributed earnings	$	(57,685)	$	(2,759)	$	(173,167)	$	(8,817)
Denominator:
Weighted average common shares outstanding	165,518,152		7,917,818		163,783,626		8,339,348
Net loss per share, basic and diluted	$	(0.35)	$	(0.35)	$	(1.06)	$	(1.06)

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:


	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Stock based compensation	12,162,449	12,570,320	9,022,502	10,849,853

Description of the Business (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ 874,626	$ 639,556

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Supplemental Financial Information (Tables)

9 Months Ended

Sep. 30, 2023

Supplemental Financial Information [Abstract]

Schedule of Property and Equipment

Property and Equipment


	September 30,		December 31,
(in thousands)	2023		2022
Lab equipment	$	58,790	$	47,524
Leasehold improvements	45,791		41,872
Office equipment	22,098		20,164
Construction in progress	416		8,747
Property and equipment, gross	127,095		118,307
Less: Accumulated depreciation	(40,847)		(30,115)
Property and equipment, net	$	86,248	$	88,192

Schedule of Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities


	September 30,		December 31,
(in thousands)	2023		2022
Accrued compensation	$	22,231	$	20,433
Accrued development expenses	3,763		3,372
Accrued early discovery expenses	2,936		3,192
Materials received not invoiced	3,516		2,028
Accrued other expenses	7,360		3,879
Accrued expense and other liabilities	$	39,806	$	32,904

Schedule of Interest Income and Expense Disclosure

Interest Income, net


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Interest income	$	4,977	$	1,833	$	14,594	$	2,572
Interest expense	(25)		(13)		(71)		(42)
Interest income, net	$	4,952	$	1,820	$	14,523	$	2,530

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table summarizes total consideration:


(in thousands)
Fair value of Recursion Class A common stock	$	11,122
Fair value of Exchangeable stock	22,526
Fair value of equity awards issued to Valance equity award holders	1,933
Deferred liabilities for additional consideration	358
Total consideration	$	35,939

The following table summarizes total consideration:


(in thousands)
Fair value of Recursion Class A common stock	$	49,415
Cash	6,434
Fair value of equity awards issued to Cyclica equity award holders	6,030
Deferred liabilities for additional consideration	341
Total consideration	$	62,220

Schedule of Fair Value Of Assets Acquired and Liabilities Assumed

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:


(in thousands)
Cash	$	4,235
Other receivables	485
Intangible asset - technology	15,000
Accounts payable and accrued liabilities	(872)
Deferred income taxes	(2,892)
Total identifiable net assets	$	15,956
Goodwill	19,983
Total assets acquired and liabilities assumed	$	35,939

The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:


(in thousands)
Cash	$	2,429
Restricted cash	1,685
Other receivables	736
Investments	1,000
Other current assets	385
Intangible assets - technology	28,000
Accounts payable and accrued liabilities	(579)
Unearned revenue	(1,754)
Deferred income taxes	(1,443)
Other liabilities, current	(66)
Other liabilities, non-current	(139)
Total identifiable net assets	$	30,254
Goodwill	31,965
Total assets acquired and liabilities assumed	$	62,219

Schedule of Business Acquisitions, Pro Forma Information

The following table presents the unaudited pro forma combined results of operations of Recursion, Valence and Cyclica as if the acquisitions had occurred on January 1, 2022:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Net revenue	$	10,534	$	13,478	$	33,970	$	26,942
Net loss	(92,553)		(66,836)		(245,391)		(207,131)

Common Stock	9 Months Ended
Common Stock	Sep. 30, 2023
Equity [Abstract]
Common Stock	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 September 30, 2023 and December 31, 2022, no dividends had been declared. At-The-Market Offering In August 2023, the Company entered into an Open Market Sales Agreement (the “Sales Agreement”) with Jefferies LLC (the “Sales Agent”), to provide for the offering, issuance and sale of up to an aggregate amount of $300.0 million of our Class A common stock from time to time in “at-the-market” offerings. As of September 30, 2023, the Company may sell and issue $300.0 million in Class A common stock. There have been no sales of shares under the agreement as of September 30, 2023. We are not required to sell shares under the Sales Agreement. We will pay the Sales Agent a commission of up to 3% of the aggregate gross proceeds we receive from all sales of our Class A common stock under the Sales Agreement. The Sales Agreement continues until the earlier of selling all shares available under the Sales Agreement or terminated by written notice from either of the parties. The ATM Offering is being made under a prospectus supplement dated August 8, 2023, and related prospectus to be filed with the Securities and Exchange Commission pursuant to our automatically effective shelf registration statement on Form S-3ASR (Registration No. 333-264845). NVIDIA Private Placement On July 11, 2023, Recursion entered into a Stock Purchase Agreement for a private placement with NVIDIA Corporation (2023 Private Placement), pursuant to which the Company sold an aggregate of 7,706,363 shares of the Company’s Class A common stock at a price of $6.49 per share for net proceeds of approximately $50.0 million. Valence Acquisition Exchangeable Shares In May 2023, in connection with the acquisition of Valence, the Company entered into an agreement to issue up to 5,904,827 shares of Class A common stock (the “Exchange Shares”), that may be issued upon exchange, retraction or redemption of exchangeable shares of 14998685 Canada Inc., a corporation governed by the laws of Canada and an indirect wholly-owned subsidiary of Recursion. Each exchangeable share of a 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. The Company’s calculation of weighted-average shares outstanding includes the exchangeable shares. 2022 Private Placement In October 2022, Recursion issued 15,336,734 shares of the Company’s Class A common stock (the Shares) at a purchase price of $9.80 per share in a private placement (the 2022 Private Placement) to qualified institutional buyers and institutional accredited investors (the Purchasers) for net proceeds of $143.7 million, after deducting fees and offering costs of $6.6 million. Registration Rights Agreements Acquisitions 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 resale shares by the Sellers. The agreement must remain effective for a period of not less than three years. In May 2023, in connection with the acquisition of Cyclica, the Company entered into a Registration Agreement providing for the registration for resale of the shares of Class A common stock issued in such transaction. A prospectus supplement to a registration statement (File No. 333-264845) was subsequently filed in June 2023 to register the resale shares by the Sellers. The agreement must be continuously effective until the earlier of the date that all shares have been sold thereunder or are able to be publicly sold by relying on Rule 144 of the Securities Act without registration. NVIDIA Private Placement In July 2023, in connection with the 2023 Private Placement with NVIDIA, the Company entered into a Registration Rights Agreement providing for the registration for resale of the shares of Class A common stock issued in such transaction. A prospectus supplement to a registration statement (File No. 333-264845) was subsequently filed in August 2023 to register the resale of the shares of Class A common stock by the Purchasers. The Company has agreed to use commercially reasonable efforts to keep the registration statement continuously effective until such date that all Registrable Securities covered by the agreement have been sold. In the event the holders cannot sell their shares due to certain circumstances causing the agreement to be ineffective, the Company must pay each holder of shares outstanding on the date and each month thereafter 1.0% of the aggregate purchase price with the maximum payable amount of 5.0% of the aggregate purchase price. As of September 30, 2023, there was no accrued liability related to this agreement, as it was not probable that a payment would be required. 2022 Private Placement In October 2022, in connection with the 2022 Private Placement, the Company entered into a Registration Rights Agreement providing for the registration for resale of the shares of Class A common stock issued in such transaction. A prospectus supplement to a registration statement (File No. 333-264845) was subsequently filed in October 2022 to register the resale of the shares of Class A common stock by the Purchasers. The agreement must remain effective until registrable securities covered by the agreement have been publicly sold by the holders or all shares cease to be registrable securities. In the event the holders cannot sell their shares due to certain circumstances causing the agreement to be ineffective, the Company must pay each holder of shares outstanding on the date and each month thereafter 1.0% of the aggregate purchase price paid by the holder without limit until the agreement is cured. As of September 30, 2023, there was no accrued liability related to this agreement, as it was not probable that a payment would be required. 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. All Class B common stock is held by Christopher Gibson, Ph.D., the Company’s Chief Executive Officer (CEO), or his affiliates. As of September 30, 2023, Dr. Gibson and his affiliates held outstanding shares of Class B common stock representing approximately 28% of the voting power of the Company’s outstanding shares. This voting power may increase over time as Dr. Gibson vests in and exercises equity awards outstanding. If all the exchangeable equity awards held by Dr. Gibson had been fully vested, exercised and exchanged for shares of Class B common stock as of September 30, 2023, Dr. Gibson and his affiliates would hold approximately 29% of the voting power of the Company’s outstanding shares. As a result, Dr. Gibson will be able to significantly influence any action requiring the approval of Recursion stockholders, including the election of the Board of Directors; the adoption of amendments to the Company’s certificate of incorporation and bylaws; and the approval of any merger, consolidation, sale of all or substantially all of the Company’s assets, or other major corporate transaction.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 14
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 6
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-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Description of the Business	9 Months Ended
Description of the Business	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business Recursion Pharmaceuticals, Inc. (Recursion, the Company, we or our) was originally formed as a limited liability company on November 4, 2013 under the name Recursion Pharmaceuticals, LLC. In September 2016, the Company converted to a Delaware corporation and changed its name to Recursion Pharmaceuticals, Inc. Recursion is a clinical stage TechBio company decoding biology 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 September 30, 2023, the Company had an accumulated deficit of $874.6 million. 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 with its subsidiaries 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 convertible preferred stock and the issuance of Class A common stock (see Note 8, “Common Stock” for additional details). Additionally, we have received payments from our strategic partnerships (see Note 9, “Collaborative Development Contracts” for additional details). Recursion will likely be required to raise additional capital. As of September 30, 2023, 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.

Stock-Based Compensation - Summary of Stock-based Compensation Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	$ 16,342	$ 8,653	$ 36,000	$ 19,498
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	2,123	732	4,549	1,560
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	6,579	3,674	13,590	7,404
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based payment arrangement, expense	$ 7,640	$ 4,247	$ 17,861	$ 10,534

Leases - Lease Term and Discount Rates (Details)	Sep. 30, 2023
Leases [Abstract]
Weighted-average remaining lease term (years)	6 years 10 months 24 days
Weighted-average discount rate	7.80%

Acquisitions - Schedule of Business Acquisitions, Pro Forma Information (Details) - Recursion, Valence And Cyclica - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Net revenue	$ 10,534	$ 13,478	$ 33,970	$ 26,942
Net loss	$ (92,553)	$ (66,836)	$ (245,391)	$ (207,131)

Common Stock (Details)					1 Months Ended		9 Months Ended		12 Months Ended
Common Stock (Details)	Sep. 30, 2023 USD ($) vote	Aug. 08, 2023 USD ($)	Jul. 11, 2023 USD ($) $ / shares shares	May 16, 2023 shares	May 31, 2023	Oct. 31, 2022 USD ($) $ / shares shares	Sep. 30, 2023 USD ($) vote	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Jul. 31, 2023	Apr. 30, 2021 class
Class of Stock [Line Items]
Dividends, stock							$ 0		$ 0
Proceeds from private placement of stock							$ 50,000,000	$ 0
Number of classes of common stock authorized \| class											2
CEO and Affiliates
Class of Stock [Line Items]
Affiliated holders, ownership percentage	0.28						0.28
Affiliated holders, potential ownership percentage when outstanding equity awards vest	0.29						0.29
Canada Inc.
Class of Stock [Line Items]
Common stock, number of issuable shares from exchange (in shares) \| shares				14,998,685
Valence Discovery Inc
Class of Stock [Line Items]
Registration rights agreement, term					3 years
NVDIA Private Placement
Class of Stock [Line Items]
Percent of aggregate purchase price paid by the holder due if agreement is broken										1.00%
Registration rights agreement, accrued liability	$ 0						$ 0
NVDIA Private Placement \| Maximum
Class of Stock [Line Items]
Percent of aggregate purchase price paid by the holder due if agreement is broken										5.00%
2022 Private Placement
Class of Stock [Line Items]
Percent of aggregate purchase price paid by the holder due if agreement is broken						1.00%
Registration rights agreement, accrued liability	$ 0						$ 0
Class A
Class of Stock [Line Items]
Vote per share of common stock (in votes) \| vote	1						1
Shares issued, price per share (in USD per share) \| $ / shares			$ 6.49
Proceeds from private placement of stock			$ 50,000,000
Common stock, conversion ratio	1			1			1
Class A \| At-the-Market offering program
Class of Stock [Line Items]
Sale of stock, value authorized	$ 300,000,000	$ 300,000,000
Sale of Stock, percentage of commission		3.00%
Class A \| NVDIA Private Placement
Class of Stock [Line Items]
Common stock issuance for private placement, net of issuance costs (in shares) \| shares			7,706,363
Class A \| 2022 Private Placement
Class of Stock [Line Items]
IPO, number of shares issued (in shares) \| shares						15,336,734
Price per share (in dollars per share) \| $ / shares						$ 9.80
IPO, net proceeds received						$ 143,700,000
IPO, underwriting discounts and commissions						$ 6,600,000
Class B
Class of Stock [Line Items]
Vote per share of common stock (in votes) \| vote	10						10
Exchangeable Stock \| Valence Discovery Inc
Class of Stock [Line Items]
Contingent consideration, equity interests issuable (in shares) \| shares				5,904,827

Collaborative Development Contracts - Narrative (Details) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended
	Jan. 31, 2022 USD ($) phenomap program performance_obligation	Oct. 31, 2020 USD ($) performance_obligation	Aug. 31, 2020 project	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue				$ 10,533	$ 13,160	$ 33,684	$ 26,167
Contract with customer, asset				7,900		7,900
Collaborative arrangement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue				$ 10,100		$ 33,300
Revenue recognized					$ 2,500		$ 7,500
Roche and Genentech
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Remaining unearned revenue	$ 150,000
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	3
Remaining performance obligation revenue	$ 150,000
Roche and Genentech \| Phenomaps creation
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 250,000
Number of eligible phenomaps (in phenomaps) \| phenomap	16
Roche and Genentech \| Phenomaps raw images
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 250,000
Number of eligible phenomaps (in phenomaps) \| phenomap	12
Roche and Genentech \| Developed and commercialized programs
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series	$ 300,000
Number of projects that may be initiated (in projects) \| program	40
Roche and Genentech \| Gastrointestinal cancer
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	1
Roche and Genentech \| Neuroscience
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation	2
Bayer AG \| Collaborative arrangement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research project, fees and milestones payments receivable for an option on a lead series		$ 100,000
Number of projects that may be initiated (in projects) \| project			10
Number of performance obligations under the agreement (in performance obligations) \| performance_obligation		1
Remaining performance obligation revenue		$ 30,000
Collaborative agreement, term			5 years
Non-refundable upfront payment received		30,000
Research project, fees and milestones payments receivable for an option on a development candidate		$ 120,000

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 387,322	$ 549,912
Restricted cash	2,256	1,280
Other receivables	3,164	2,753
Other current assets	17,780	15,869
Total current assets	410,522	569,814
Restricted cash, non-current	7,629	7,920
Property and equipment, net	86,248	88,192
Operating lease right-of-use assets	34,062	33,255
Intangible assets, net	39,459	1,306
Goodwill	52,750	801
Other assets, non-current	155	0
Total assets	630,825	701,288
Current liabilities
Accounts payable	4,265	4,586
Accrued expenses and other liabilities	39,806	32,904
Unearned revenue	43,997	56,726
Notes payable	695	97
Operating lease liabilities	5,355	5,952
Total current liabilities	94,118	100,265
Unearned revenue, non-current	51,383	70,261
Notes payable, non-current	1,126	536
Operating lease liabilities, non-current	44,300	44,420
Deferred tax liabilities	1,931	0
Total liabilities	192,858	215,482
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 September 30, 2023 and December 31, 2022; 216,313,682 shares (Class A 207,964,366, Class B 7,599,871 and Exchangeable 749,445) and 191,022,864 shares (Class A 183,209,655, Class B 7,813,209 and Exchangeable 0) issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	2	2
Additional paid-in capital	1,312,591	1,125,360
Accumulated deficit	(874,626)	(639,556)
Total stockholders’ equity	437,967	485,806
Total liabilities and stockholders’ equity	$ 630,825	$ 701,288

Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost	$ 2,024	$ 2,017	$ 6,042	$ 5,801
Variable lease cost	532	102	1,689	772
Short-term lease cost	66	0	107	0
Lease cost	$ 2,622	$ 2,119	$ 7,838	$ 6,573

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Tempus license On November 3, 2023, Recursion entered into a five-year license agreement with Tempus Labs, Inc. (Tempus) for access to their 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 will make annual payments, ranging between $22.0 million and $42.0 million, up to $160.0 million in aggregate, to Tempus in cash or equity. Supercomputer upgrade On October 31, 2023 Recursion entered into an agreement to upgrade its Supercomputer (BioHive-1) for approximately $30.0 million.

Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net loss	$ (93,017)	$ (60,445)	$ (235,070)	$ (181,984)
Unrealized gain on investments	0	197	0	87
Net realized loss on investments reclassified into net loss	0	0	0	39
Other comprehensive income	0	197	0	126
Comprehensive loss	$ (93,017)	$ (60,248)	$ (235,070)	$ (181,858)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

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 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. Recursion also holds restricted cash related to a Bill and Melinda Gates Foundation grant.

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)	September 30, 2023		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	368,215	$	368,215	$	—	$	—
Restricted cash	9,885		9,885		—		—
Total assets	$	378,100	$	378,100	$	—	$	—


			Basis of fair value measurement
(in thousands)	December 31, 2022		Level 1		Level 2		Level 3
Assets
Cash equivalents:
Money market funds	$	404,613	$	404,613	$	—	$	—
Restricted cash	9,200		9,200		—		—
Total assets	$	413,813	$	413,813	$	—	$	—

In addition to the financial instruments that are recognized at fair value on the Condensed 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)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Liabilities
Current portion of notes payable	$	695	$	97	$	695	$	97
Notes payable, net of current portion	1,126		536		1,126		536
Total liabilities	$	1,821	$	633	$	1,821	$	633

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Apr. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted in period, weighted average grant date fair value (in dollars per share)	$ 5.64	$ 6.57
Unvested stock options, unamortized stock-based compensation cost	$ 39.6
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition	2 years
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	4 years
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested stock options, unamortized stock-based compensation cost, weighted average period recognition	4 years
Fair market value of vested shares	$ 19.8
Unrecognized compensation cost	$ 141.4
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, vesting period	4 years
Stock options, expiration period	10 years
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, capital shares reserved for future issuance (in shares)			16,186,000
Number of shares available for grant (in shares)	8,868,107

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net loss	$ (93,017)	$ (60,445)	$ (235,070)	$ (181,984)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expenses

The following table presents the classification of stock-based compensation expense for employees and non-employees within the Condensed Consolidated Statements of Operations:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Cost of revenue	$	2,123	$	732	$	4,549	$	1,560
Research and development	6,579		3,674		13,590		7,404
General and administrative	7,640		4,247		17,861		10,534
Total	$	16,342	$	8,653	$	36,000	$	19,498

Schedule of Share-based Payment Arrangement, Option, Activity

Stock option activity during the nine months ended September 30, 2023 was as follows:


(in thousands except share data)	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2022	16,154,924	$	5.10	7.5	$	67,997
Granted	5,083,268	6.23
Cancelled	(910,758)	8.54
Exercised	(3,547,071)	2.19			25,887
Outstanding as of September 30, 2023	16,780,363	$	5.90	7.2	$	55,896
Exercisable as of September 30, 2023	9,897,994	$	4.70	6.5	$	43,681

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following weighted-average assumptions were used to calculate the grant-date fair value of stock options:


	Nine months ended September 30,
	2023		2022
Expected term (in years)	5.8		6.2
Expected volatility	66	%	63	%
Expected dividend yield	—		—
Risk-free interest rate	3.6	%	1.9	%

Schedule of Nonvested RSU Activity

The following table summarizes Recursion’s RSU activity during the nine months ended September 30, 2023:


	Stock units	Weighted-average grant date fair value
Outstanding as of December 31, 2022	6,894,525	$	8.17
Granted	13,950,469	8.65
Vested	(2,360,411)	4.03
Forfeited	(765,227)	8.27
Outstanding as of September 30, 2023	17,719,356	$	8.45

Fair Value Measurements - Asset and Liability Not Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Book values
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total liabilities	$ 1,821	$ 633
Book values \| Notes payable
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Current portion of notes payable	695	97
Notes payable, net of current portion	1,126	536
Fair values
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Total liabilities	1,821	633
Fair values \| Notes payable
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items]
Current portion of notes payable	695	97
Notes payable, net of current portion	$ 1,126	$ 536

Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Stock based compensation
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of loss per share, amount (in shares)	12,162,449	12,570,320	9,022,502	10,849,853

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company did not record any U.S. income tax expense during the three and nine months ended September 30, 2023 and 2022. The Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. Foreign taxes were insignificant during the three and nine months ended September 30, 2023 and 2022. 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 have occurred previously or that could occur in the future 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. The Company is conducting a study to assess whether a change of ownership has occurred or whether there have been multiple ownership changes since inception. If the Company has experienced a change of ownership, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed and any limitation is known, no amounts are being presented as an uncertain tax position. The Company files income tax returns in the United States, Canada, United Kingdom, Utah, California and Massachusetts. 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Components of Lease Cost, Supplemental Cash Flow Information Related to Leases, Lease Term and Discount Rates

The components of the lease cost are as follows:


	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease cost	$	2,024	$	2,017	$	6,042	$	5,801
Variable lease cost	532		102		1,689		772
Short-term lease cost	66		—		107		—
Lease cost	$	2,622	$	2,119	$	7,838	$	6,573

Lease term and discount rates as of September 30, 2023 were:


(in thousands)	September 30, 2023
Operating leases
Weighted-average remaining lease term (years)	6.9
Weighted-average discount rate	7.8	%

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities as of September 30, 2023 were:


(in thousands)	Operating leases
Remainder of 2023	$	1,750
2024	10,005
2025	10,204
2026	10,332
2027	10,575
Thereafter	24,182
Total lease payments	67,048
Less: imputed interest	(17,393)
Present value of lease liabilities	$	49,655

Goodwill and Intangible Assets - Schedule of Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 801
Additions from acquisitions	51,949
Goodwill, ending balance	$ 52,750

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Carrying Amount of Goodwill

The following table summarizes the changes in the carrying amount of goodwill:


(in thousands)
Balance as of December 31, 2022	$	801
Additions from acquisitions	51,949
Balance as of September 30, 2023	$	52,750

Schedule of Finite-Lived Intangible Assets

The following table summarizes intangible assets:


	September 30, 2023						December 31, 2022
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible assets	$	44,376	$	(5,903)	$	38,473	$	1,211	$	(809)	$	402
Indefinite-lived intangible asset	986		—		986		904		—		904
Intangible assets, net	$	45,362	$	(5,903)	$	39,459	$	2,115	$	(809)	$	1,306

Schedule of Indefinite-Lived Intangible Assets

The following table summarizes intangible assets:


	September 30, 2023						December 31, 2022
(in thousands)	Gross carrying amount		Accumulated Amortization		Net carrying amount		Gross carrying amount		Accumulated Amortization		Net carrying amount
Definite-lived intangible assets	$	44,376	$	(5,903)	$	38,473	$	1,211	$	(809)	$	402
Indefinite-lived intangible asset	986		—		986		904		—		904
Intangible assets, net	$	45,362	$	(5,903)	$	39,459	$	2,115	$	(809)	$	1,306

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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-Paragraph 24
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+ Details

Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumption (Details) - Stock based compensation	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	5 years 9 months 18 days	6 years 2 months 12 days
Expected volatility	66.00%	63.00%
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	3.60%	1.90%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Supplemental Financial Information - Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Supplemental Financial Information [Abstract]
Interest income	$ 4,977	$ 1,833	$ 14,594	$ 2,572
Interest expense	(25)	(13)	(71)	(42)
Interest income, net	$ 4,952	$ 1,820	$ 14,523	$ 2,530

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions	Nov. 03, 2023	Oct. 31, 2023
Subsequent Event [Line Items]
Supercomputer upgrade		$ 30.0
Tempus Labs, Inc
Subsequent Event [Line Items]
License agreement, term	5 years
Minimum \| Tempus Labs, Inc
Subsequent Event [Line Items]
Annual payments	$ 22.0
Maximum \| Tempus Labs, Inc
Subsequent Event [Line Items]
Annual payments	42.0
Aggregate amount payable in cash or equity	$ 160.0

Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted stock	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Stock units
Beginning balance, outstanding (in shares) \| shares	6,894,525
Granted (in shares) \| shares	13,950,469
Vested (in shares) \| shares	(2,360,411)
Forfeited (in shares) \| shares	(765,227)
Ending balance, outstanding (in shares) \| shares	17,719,356
Weighted-average grant date fair value
Beginning balance, outstanding Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 8.17
Granted (in dollars per share) \| $ / shares	8.65
Vested (in dollars per share) \| $ / shares	4.03
Forfeited (in shares) \| $ / shares	8.27
Ending balance, outstanding Weighted average grant date fair value (in dollars per share) \| $ / shares	$ 8.45

Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
Remainder of 2023	$ 1,750
2024	10,005
2025	10,204
2026	10,332
2027	10,575
Thereafter	24,182
Total lease payments	67,048
Less: imputed interest	(17,393)
Present value of lease liabilities	$ 49,655

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended December 31, 2022. It is management’s opinion that these condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial statements. Revenue and net loss for any interim period are not necessarily indicative of future or annual results.
Recent Accounting Pronouncements	Recent Accounting Pronouncements New accounting pronouncements are routinely issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies and adopted by Recursion as of the specified effective date. The Company does not expect the impact of recently issued standards that are not yet effective will have a material impact on its condensed consolidated financial statements and disclosures.

Goodwill and Intangible Assets - Schedule of Intangible assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment	$ 0	$ 0	$ 0	$ 0
Intangible Assets, Net
Gross carrying amount	44,376,000		44,376,000		$ 1,211,000
Accumulated Amortization	(5,903,000)		(5,903,000)		(809,000)
Net carrying amount	38,473,000		38,473,000		402,000
Indefinite-lived intangible asset	986,000		986,000		904,000
Intangible assets, gross	45,362,000		45,362,000		2,115,000
Intangible assets, net	39,459,000		39,459,000		$ 1,306,000
Amortization expense	3,400,000	76,000	5,100,000	228,000
Impairment of indefinite-lived intangible assets	$ 0	$ 0	$ 0	$ 0

Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue
Revenue	$ 10,533	$ 13,160	$ 33,684	$ 26,167
Operating costs and expenses
Cost of revenue	10,877	15,409	32,706	37,435
Research and development	70,007	40,836	171,744	111,716
General and administrative	29,199	19,488	80,364	61,761
Total operating costs and expenses	110,083	75,733	284,814	210,912
Loss from operations	(99,550)	(62,573)	(251,130)	(184,745)
Other income, net	6,533	2,128	16,060	2,761
Net loss	$ (93,017)	$ (60,445)	$ (235,070)	$ (181,984)
Per share data
Net loss per share of Class A, B and Exchangeable common stock, basic (in dollars per share)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Net loss per share of Class A, B and Exchangeable common stock, diluted (in dollars per share)	$ (0.43)	$ (0.35)	$ (1.16)	$ (1.06)
Weighted-average shares (Class A, B and Exchangeable) outstanding, basic (in shares)	214,327,186	173,435,970	203,090,637	172,122,974
Weighted-average shares (Class A, B and Exchangeable) outstanding, diluted (in shares)	214,327,186	173,435,970	203,090,637	172,122,974
Operating revenue
Revenue
Revenue	$ 10,102	$ 13,053	$ 33,252	$ 26,005
Grant revenue
Revenue
Revenue	$ 431	$ 107	$ 432	$ 162

Leases - Narrative (Details) $ in Thousands	1 Months Ended	9 Months Ended
Leases - Narrative (Details) $ in Thousands	May 31, 2022 USD ($) ft²	Sep. 30, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease, renewal term		5 years
Increase in operating lease right-of-use assets		$ 3,400
Total lease payments		$ 67,048
Toronto lease
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	5 years
Square footage of leased space (in square feet) \| ft²	28,110
Lease term	10 years
Tenant improvement allowance	$ 1,600
Total lease payments	$ 11,100
Minimum
Lessee, Lease, Description [Line Items]
Remaining operating lease term		1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining operating lease term		9 years

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Contract Obligations In the normal course of business, the Company enters into contracts with clinical research organizations, drug manufacturers and other vendors for preclinical and clinical research studies, research and development supplies and other services and products for operating purposes. These contracts generally provide for termination on notice and are cancellable contracts. 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 September 30, 2023 and December 31, 2022, 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 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. On June 23, 2023, the landlord filed a lawsuit against the Company (Industry Office SLC, LLC v. Recursion Pharmaceuticals, Inc., Case No. 230904627) in the Third District Court for Salt Lake County, State of Utah (the Court), alleging anticipatory repudiation and breach of contract. The Plaintiff seeks monetary damages and attorney’s fees. In July 2023, the Company filed a motion to dismiss. In September 2023, Recursion was granted its motion to dismiss, and the Court provided the landlord until October 23, 2023, to amend and re-file the dismissed complaint. On October 23, 2023, the landlord filed an amended complaint again alleging anticipatory repudiation, breach of contract, and breach of the implied covenant of good faith and fair dealing (the Amended Complaint), and seeks monetary damages and attorney’s fees. On November 6, 2023, the Company filed a motion to dismiss the Amended Complaint. As of September 30, 2023, the Company had no liability recorded for these events as an unfavorable outcome was not probable. In connection with the Industry Lease, on September 15, 2023, the Company filed claims in the Court against the landlord alleging, among other things, breach of contract and fraudulent misrepresentation (the Counterclaims). On October 6, 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 damages or range of damages associated with the Counterclaims.

Supplemental Financial Information - Accruals (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Supplemental Financial Information [Abstract]
Accrued compensation	$ 22,231	$ 20,433
Accrued development expenses	3,763	3,372
Accrued early discovery expenses	2,936	3,192
Materials received not invoiced	3,516	2,028
Accrued other expenses	7,360	3,879
Accrued expenses and other liabilities	$ 39,806	$ 32,904

Stock-Based Compensation - Schedule of Share-based Payment Arrangement, Option, Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, outstanding, number at beginning of period (in shares) \| shares	16,154,924
Options, granted in period (in shares) \| shares	5,083,268
Options, cancelled in period (in shares) \| shares	(910,758)
Options, exercised in period (in shares) \| shares	(3,547,071)
Options, outstanding, number at end of period (in shares) \| shares	16,780,363	16,154,924
Options, exercisable, number (in shares) \| shares	9,897,994
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Options, outstanding, weighted average exercise price at beginning of period (in dollars per share) \| $ / shares	$ 5.10
Options, grants in period, weighted average exercise price (in dollars per share) \| $ / shares	6.23
Options, cancelled in period, weighted average exercise price (in dollars per share) \| $ / shares	8.54
Options, exercised in period, weighted average exercise price (in dollars per share) \| $ / shares	2.19
Options, outstanding, weighted average exercise price at end of period (in dollars per share) \| $ / shares	5.90	$ 5.10
Options, exercisable, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.70
Options, outstanding, weighted average remaining contractual life	7 years 2 months 12 days	7 years 6 months
Options, exercisable, weighted average remaining contractual life	6 years 6 months
Options, outstanding, intrinsic value \| $	$ 55,896	$ 67,997
Options, exercised in period, intrinsic value \| $	25,887
Options, exercisable, intrinsic value \| $	$ 43,681