The following is a discussion and analysis of the financial condition of Recursion Pharmaceuticals, Inc. (Recursion, the Company, we, us or our) and the results of our operations. This commentary should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying notes appearing in Item 1, “Financial Statements” and the Company’s audited consolidated financial statements and accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Annual Report on Form 10-K for the year ended December 31, 2025 (the 2025 Annual Report). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Note About Forward-Looking Statements" in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading "Risk Factors" in the 2025 Annual Report and in our subsequent Quarterly Reports on Form 10-Q, including this Quarterly Report on Form 10-Q, for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law. Investors and others should note that we announce material financial and other information to our investors using our investor relations website (https://ir.recursion.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media and blogs to communicate with our stakeholders and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website. Information contained in, or that can be accessed through, our website is not a part of, and is not incorporated into, this report. Overview Recursion is a clinical-stage TechBio company with a mission to decode biology to radically improve lives. We have advanced a portfolio of differentiated internal programs and strategic partnerships powered by our integrated drug discovery and development platform, the Recursion Operating System (OS). This platform provides end-to-end, AI-native capabilities that span from novel biological ideas through the clinic, integrating multimodal biological data generation, AI-powered small molecule synthesis, and AI-enabled clinical development. All of our technologies are designed to translate complex science into medicines that matter — faster, better, and at scale — for patients who are waiting. Business Highlights Genentech Advances First Neuroscience Target into Early Discovery Program Genentech has exercised the first Validated Target Option under the companies' neuroscience collaboration, advancing a previously unexplored neuroscience target into a small molecule early discovery program. The milestone provides additional early evidence that Recursion's AI-native platform can both discover and play a key role experimentally validating novel therapeutic targets in neuroscience, one of medicine's most challenging therapeutic areas, where decades of research have largely focused on a limited number of well-studied targets. In partnership with Roche and Genentech, Recursion built the first whole-genome CRISPR knockout map generated from a subset of over 1 trillion internally manufactured iPSC-derived neuronal cells. Predictions generated from the Maps were experimentally evaluated through a rigorous validation process developed jointly with Genentech. Candidate targets advanced through successive stages of pathway validation, functional validation, and disease validation to determine whether modulating the target altered neurological disease phenotype. Only targets that consistently demonstrated compelling evidence across each stage advanced into a validation package. Next steps will include advancing the target through small molecule design, hit generation and validation using Recursion's AI-native chemistry platform. More broadly, the neuronal and microglial maps of biology remain reusable assets capable of being utilized with biological, genetics, and computational expertise to generate and experimentally validate additional therapeutic hypotheses. To date, Recursion has achieved $216 million in upfront and milestones payments from the Roche and Genentech collaboration. The collaboration includes up to 40 20 Table of Contents potential small molecule discovery programs, each carrying the potential for more than $300 million in development, commercialization, and net sales milestones as well as tiered royalties up to high single digits per small molecule program for Recursion. Advancing joint portfolio with Sanofi across I&I and oncology Recursion, in collaboration with Sanofi, made significant progress toward development candidate milestones over the past 12 months. Recursion and Sanofi are advancing a joint portfolio of differentiated molecules for challenging targets in I&I and oncology. To date, Recursion has achieved $134 million in upfront and milestone payments from the Sanofi collaboration and has the potential for $343 million in milestone payments per program plus tiered double digit royalties. Potential upcoming milestones across partnered discovery: –Potential for differentiated AI-enabled oral molecules to reach development candidate and late-stage discovery milestones with Sanofi over the next 6-12 months –Translating AI-driven insights from maps of biology into new potentially novel targets from reusable high-dimensional data/maps –Using Recursion’s Chemistry Platform to design a potential first-in-class molecule for the collaboration's neuroscience target announced today with Genentech –Continuing to combine our phenomics dataset with Genentech’s proprietary transcriptomics data to build multi-modal maps designed to explore potential novel targets and pathways by systematically linking gene perturbations to cellular phenotypes Internal Pipeline Updates Continued Momentum for REC-4881 (MEK1/2): REC-4881, Recursion’s MEK1/2 inhibitor, is a potential first-in-class drug designed to address both known drivers of FAP polyp growth: the Wnt/β-catenin initiation pathway and the MAPK evolution pathway. This dual mechanism differentiates REC-4881 from other investigational FAP therapies, which to date have targeted only a single pathway. REC-4881 is being developed for FAP, an orphan disease affecting an estimated >50,000 diagnosed patients across the US and EU5, representing a >$10 billion total addressable market opportunity. FAP is a serious, lifelong chronic disease with no approved medicines today. REC-4881 has received both Orphan Drug Designation and 21 Table of Contents Fast Track Designation from the US FDA. REC-4881 has demonstrated meaningful activity across the GI tract, including the Upper GI, an area of particularly high unmet need. Key updates: •Discussions with FDA were initiated in 1H26 and an update to define the registrational path is expected in 2H26 •TUPELO now enrolling patients ages 18 and older, as well as a cohort with an alternative dosing schedule •Additional Phase 2 safety and efficacy data from the TUPELO clinical trial contextualized with real world data will be presented at the Collaborative Group of the Americas on Inherited Gastrointestinal Cancer (CGA-IGC) Annual Meeting in November. CGA-IGC is a leading annual meeting dedicated specifically to hereditary GI cancer syndromes including FAP. ◦Presentation title: Updated safety and efficacy data of REC-4881 monotherapy in familial adenomatous polyposis: Phase 1b/2 trial results contextualized with real-world registry data ◦Session name: Presidential Plenary I ◦Session date and time: Monday November 2, 2026; 13:30 - 15:00 MST Phase 1/2 Trial Initiation for REC-7735 expected in 2H26: •REC-7735, Recursion’s AI-designed PI3Kα H1047R inhibitor, was built to improve therapeutic index for a validated oncology target •REC-7735 was precision designed to show >100-fold selectivity for the H1047R mutant over wild type in order to drive high, sustained target inhibition while avoiding hyperinsulinemia-driven reactivation •The differentiated development candidate was delivered in 10 months and 242 compounds from first novel hit through Recursion’s AI-native design platform, demonstrating the Company’s ability to rapidly translate platform insights into optimized clinical candidates •With the IND cleared, the Phase 1/2 ZINNIA clinical study for patients with select PIK3CA H1047R-mutant solid tumors will be initiated in the second half of 2026 For the rest of the portfolio, programs continue to progress as planned. Additional expected upcoming milestones across Recursion’s internal pipeline: •REC-1245 (RBM39): Additional Phase 1 dose escalation data expected in 2H26 •REC-617 (CDK7): Early Phase 1 safety and PK combination data expected in 1H27 •REC-3565 (MALT1): Early Phase 1 safety and PK monotherapy data expected in 1H27 •REC-4539 (LSD1): Early Phase 1 safety and PK monotherapy data expected in 2H27 Agentic AI is compounding Recursion's advantage across Biology, Design, and ClinTech: •Target Discovery Agent pairs frontier AI reasoning with Recursion's proprietary multimodal maps to surface novel drug targets, enabling scientists to mine and extract insights from proprietary maps in hours rather than weeks. •Drug Design Agents reason across Recursion's full set of structure-activity relationship (SAR) and structural data to identify what to solve next and how, with structural analysis time reduced from 4 hours to 30 minutes and agent-generated hypotheses now driving design cycles in active programs. •Clinical Strategy Orchestration Agent coordinates patient, site, operational, CMC, and biometrics data to inform clinical development decisions, with agent-supported enrollment strategies contributing to a 1.3 to 1.6x increase in enrollment rates versus historical benchmarks. Continuing to strengthen our leadership team: •Hoifung Poon, Ph.D., appointed Chief AI Officer: Poon brings more than 15 years of experience at Microsoft, where he led groundbreaking work in biomedical AI, including foundation models in digital pathology and spatial omics published in Nature and Cell. His open-weight models have been downloaded tens of millions of times and deployed at major health systems. •Donovan Chin, Ph.D., appointed Senior Vice President, Drug Design: Chin brings more than 20 years of experience spanning small molecules, RNA-targeted therapeutics, proximity approaches and novel peptide modalities. At Parabilis Medicines, he led the AI and physics-based computational drug discovery 22 Table of Contents strategy behind Helicons, a novel class of constrained ⍺-helical peptides. Earlier, at Arrakis Therapeutics, he pioneered computational approaches for RNA-targeted drug discovery, unlocking small-molecule engagement of previously inaccessible RNA structures. Financing and Operations Since 2024, our financing and operations activities include the following: In June 2024, we issued an aggregate of 35.4 million shares of our Class A common stock at a purchase price of $6.50 per share and received net proceeds of $216.5 million, after deducting transaction costs of $13.6 million. In September 2024, we received a Phenomap acceptance fee of $30.0 million from our collaboration with Roche. In February 2025, the Company terminated the Sales Agreement with Jefferies LLC and entered into a Sales Agreement with Citigroup Capital Markets Inc., to provide for the offering, issuance and sale of up to an aggregate amount of $500.0 million of its Class A common stock. In 2025, the Company sold 99.9 million shares and received net proceeds of $491.7 million under the agreement. Pursuant to its terms, the Sales Agreement was completed and no amount remained available for future sales. In 2025, we received multiple milestone payments related to our collaborative development contracts totaling $37.0 million, with aggregate milestone inflows in 2026 of $4.0 million. In February 2026, the Company entered into a Sales Agreement with TD Securities (USA) LLC (TD Cowen), to provide for the offering, issuance and sale of up to an aggregate amount of $300.0 million of its Class A common stock. As of June 30, 2026, no amounts have been sold under the Sales Agreement with TD Cowen. We use the capital we have raised to fund operating and investing activities across platform research operations, drug discovery, clinical development, digital and other infrastructure, creation of our portfolio of intellectual property and administrative support. We do not have any products approved for commercial sale and have not generated any revenues from product sales. Cash, cash equivalents and restricted cash totaled $556.8 million as of June 30, 2026. Based on our current operating plan, we believe that our cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months. Since inception, we have incurred significant operating losses. Our net losses were $131.0 million and $248.5 million during the three and six months ended June 30, 2026, respectively. Our net losses were $171.9 million and $374.4 million during the three and six months ended June 30, 2025, respectively. As of June 30, 2026, our accumulated deficit was $2.3 billion. As of June 30, 2026, we did not have any unconditional outstanding commitments for additional funding. We anticipate that we will need to raise additional financing in the future to fund our operations, including the potential commercialization of any approved product candidates. Until such time, if ever, as we can generate significant product revenue, we expect to finance our operations with our existing cash and cash equivalents, any future equity or debt financings and upfront, milestone and royalty payments, if any, received under current or future license or collaboration agreements. We may not be able to raise additional capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition may be adversely affected. We had a valuation allowance against all of our Canadian subsidiary deferred tax assets (DTAs) as of June 30, 2026, and December 31, 2025. We intend to continue maintaining a full valuation allowance on the Canadian DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given our current earnings and anticipated future earnings of our Canadian operations, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve. 23 Table of Contents Results of Operations The following table summarizes our results of operations: (in thousands, except percentages) Three months ended June 30, Change Six months ended June 30, Change 2026 2025 $ % 2026 2025 $ % Revenue Operating revenue $ 7,303 $ 19,103 $ (11,800) (62) % $ 13,605 $ 33,921 $ (20,316) (60) % Grant revenue 367 120 247 >100% 538 47 491 >100% Total revenue 7,670 19,223 (11,553) (60) % 14,143 33,968 (19,825) (58) % Operating costs and expenses Cost of revenue 11,491 20,161 (8,670) (43) % 23,981 41,990 (18,009) (43) % Research and development 89,614 128,636 (39,022) (30) % 177,510 258,269 (80,759) (31) % General and administrative 41,533 46,653 (5,120) (11) % 76,124 101,304 (25,180) (25) % Total operating costs and expenses 142,638 195,450 (52,812) (27) % 277,615 401,563 (123,948) (31) % Loss from operations (134,968) (176,227) 41,259 23 % (263,472) (367,595) 104,123 28 % Other income (loss), net 3,962 4,330 (368) (8) % 10,359 (6,947) 17,306 >100% Loss before income tax benefit (131,006) (171,897) 40,891 24 % (253,113) (374,542) 121,429 32 % Income tax benefit (expense) 1 — 1 n/m 4,604 158 4,446 >100% Net loss $ (131,005) $ (171,897) $ 40,892 24 % $ (248,509) $ (374,384) $ 125,875 34 % n/m = Not meaningful Revenue The following table summarizes our components of revenue: Three months ended June 30, Change Six months ended June 30, Change (in thousands, except percentages) 2026 2025 $ % 2026 2025 $ % Revenue Operating revenue $ 7,303 $ 19,103 $ (11,800) (62) % $ 13,605 $ 33,921 $ (20,316) (60) % Grant revenue 367 120 247 >100% 538 47 491 >100% Total revenue $ 7,670 $ 19,223 $ (11,553) (60) % $ 14,143 $ 33,968 $ (19,825) (58) % Operating revenue is generated through research and development agreements derived from strategic alliances. We are entitled to receive variable consideration as certain milestones are achieved. The timing of revenue recognition is not directly correlated to the timing of cash receipts. For the three and six months ended June 30, 2026, the decrease in revenue compared to the prior period was due to a decrease in revenue recognized from Roche due to the successful completion of certain project phases in the prior period. 24 Table of Contents Cost of Revenue The following table summarizes our cost of revenue: (in thousands, except percentages) Three months ended June 30, Change Six months ended June 30, Change 2026 2025 $ % 2026 2025 $ % Total cost of revenue $ 11,491 $ 20,161 $ (8,670) (43) % $ 23,981 $ 41,990 $ (18,009) (43) % Cost of revenue consists of the Company’s costs to provide services for drug discovery required under performance obligations with partnership customers. These primarily include materials costs, service hours performed by our employees and depreciation of property and equipment. For the three and six months ended June 30, 2026, the change in cost of revenue compared to the prior period was due to a decrease in costs of revenue recognized from Roche, which was due to the shifting scope of work across our various performance obligations as certain phases of the projects reached completion. Research and Development The following table summarizes our components of research and development expense: (in thousands, except percentages) Three months ended June 30, Change Six months ended June 30, Change 2026 2025 $ % 2026 2025 $ % Research and development expense Platform $ 42,084 $ 80,023 $ (37,939) (47) % $ 83,237 $ 148,774 $ (65,537) (44) % Discovery 14,753 22,586 (7,833) (35) % 32,693 43,436 (10,743) (25) % Clinical 23,661 19,568 4,093 21 % 41,256 37,125 4,131 11 % Stock based compensation 10,934 14,089 (3,155) (22) % 23,849 31,889 (8,040) (25) % UK R&D tax credit (1,913) (2,064) 151 (7) % (3,673) (4,345) 672 (15) % Other 95 (5,566) 5,661 n/m 148 1,390 (1,242) (89) % Total research and development expense $ 89,614 $ 128,636 $ (39,022) (30) % $ 177,510 $ 258,269 $ (80,759) (31) % n/m = Not meaningful Research and development expenses account for a significant portion of our operating expenses. We recognize research and development expenses as they are incurred. Research and development expenses consist of costs incurred in performing activities including: •costs to develop and operate our platform; •costs of discovery efforts which may lead to development candidates, including research materials and external research; •costs for clinical development of our investigational products; •costs for materials and supplies associated with the manufacture of active pharmaceutical ingredients, investigational products for preclinical testing and clinical trials; •personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation for employees engaged in research and development functions; •costs associated with operating our digital infrastructure; •other direct and allocated expenses incurred as a result of research and development activities, including those for facilities, depreciation, amortization and insurance; and •certain cash refundable research and development tax credits including the research and development expenditure credit (RDEC) in the United Kingdom. 25 Table of Contents We recognize expenses associated with third-party contracted services as they are incurred. Upon termination of contracts with third parties, our financial obligations are generally limited to costs incurred or committed to date. Any advance payments for goods or services to be used or rendered in future research and product development activities pursuant to a contractual arrangement are classified as prepaid expenses until such goods or services are rendered. Significant components of research and development expense include the following allocated by development phase: Platform, which refers primarily to expenses related to screening of product candidates through hit identification, this also includes expenses related to Tempus records purchased; Discovery, which refers primarily to expenses related to hit identification through development of candidates; and Clinical, which refers primarily to expenses related to development of candidates and beyond. For the three months ended June 30, 2026, the decrease in research and development expenses compared to the prior period was primarily driven by platform expense. Platform expense decreased due to a decrease in personnel cost as well as a decrease due to Tempus records purchases of $19.6 million. Discovery costs also decreased primarily due to personnel costs. For the six months ended June 30, 2026, the decrease in research and development expenses compared to the prior period was primarily driven by platform expense. Platform expense decreased due to a decrease in personnel cost as well as a decrease due to Tempus records purchases of $46.8 million. Discovery costs also decreased primarily due to personnel costs. General and Administrative Expense The following table summarizes our general and administrative expense: (in thousands, except percentages) Three months ended June 30, Change Six months ended June 30, Change 2026 2025 $ % 2026 2025 $ % Total general and administrative expense $ 41,533 $ 46,653 $ (5,120) (11) % $ 76,124 $ 101,304 $ (25,180) (25) % We expense general and administrative costs as incurred. General and administrative expenses consist primarily of salaries; including employee benefits and stock-based compensation. General and administrative expenses also include facilities, depreciation, information technology, professional fees for auditing and tax, legal fees for corporate and patent matters and insurance costs. For the three months ended June 30, 2026, the decrease in general and administrative expense compared to the prior period was primarily driven by a decrease in salaries of $4.9 million as a result of headcount reductions in the year. For the six months ended June 30, 2026, the decrease in general and administrative expense compared to prior period was primarily driven by a decrease in salaries of $11.8 million as a result of headcount reductions in the year, in addition to one-time transaction costs in the prior year associated with the Exscientia acquisition including impairment charges of $6.0 million in relation to leasehold improvements. 26 Table of Contents Other Income (loss), Net The following table summarizes our components of other income (loss), net: (in thousands, except percentages) Three months ended June 30, Change Six months ended June 30, Change 2026 2025 $ % 2026 2025 $ % Interest income $ 5,306 $ 5,443 $ (137) (3) % $ 11,269 $ 11,001 $ 268 2 % Interest expense (309) (480) 171 (36) % (659) (988) 329 (33) % Other (1,035) (633) (402) 64 % (251) (16,960) 16,709 n/m Other income (loss), net $ 3,962 $ 4,330 $ (368) (8) % $ 10,359 $ (6,947) $ 17,306 n/m n/m = Not meaningful For the three months ended June 30, 2026, the decrease in other income (loss) was not significant. For the six months ended June 30, 2026, the increase in other income (loss), net compared to the prior period related to our loss on disposal of Exscientia GmbH and our Vienna lease termination for the six months ended June 30, 2025. 27 Table of Contents Liquidity and Capital Resources Sources of Liquidity We have not yet commercialized any products and do not expect to generate revenue from the sales of any product candidates for at least several years. Cash, cash equivalents and restricted cash totaled $556.8 million and $753.9 million as of June 30, 2026 and December 31, 2025, respectively. We have incurred operating losses and experienced negative operating cash flows and we anticipate that the Company will continue to incur losses for at least the foreseeable future. Our net loss was $131.0 million and $248.5 million during the three and six months ended June 30, 2026, respectively. Our net loss was $171.9 million and $374.4 million during the three and six months ended June 30, 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $2.3 billion. Since 2024, we have financed our operations primarily through Class A common stock issuances. As of June 30, 2026, we have received net proceeds of $829.0 million from Class A common stock issuances. See Note 8, “Common Stock” to the Condensed Consolidated Financial Statements for additional details on Class A common stock issuances. Additionally, as of June 30, 2026, we have received proceeds of $78.0 million from our strategic partnerships. See Note 9, “Collaborative Development Contracts” to the Condensed Consolidated Financial Statements for additional details on the strategic partnerships. Cash Flows The following table is a summary of the Condensed Consolidated Statements of Cash Flows for each of the periods presented below: Six months ended June 30, (in thousands) 2026 2025 Cash used in operating activities (187,048) (208,375) Cash used in investing activities (2,297) (13,078) Cash provided by (used in) financing activities (4,737) 138,186 Operating Activities Cash used by operating activities decreased during the six months ended June 30, 2026 as a result of lower costs incurred for research and development and general and administrative primarily due to improved operating efficiency and the strategic reprioritization of our clinical portfolio. Cash used by operating activities increased during the six months ended June 30, 2025 as a result of higher costs incurred for research and development and general and administrative primarily due to the Company’s acquisition of Exscientia. This included Exscientia GmbH disposal related payments of $9.7 million and severance payments of $10.4 million. Investing Activities Cash used by investing activities during the six months ended June 30, 2026 consisted primarily of the purchase of an intangible asset of $2.0 million Cash used by investing activities during the six months ended June 30, 2025 consisted primarily of the disposal of Exscientia GmbH of $4.4 million and property and equipment purchases of $5.0 million. Financing Activities Cash used by financing activities during the six months ended June 30, 2026 primarily included repayment of long-term debt and financing lease liabilities of $4.5 million. Cash provided by financing activities during the six months ended June 30, 2025 primarily included proceeds of $141.0 million from common stock issuances. Financing outflows included a $3.0 million payment for the purchase of an intangible asset that was not soon after the purchase. 28 Table of Contents Critical Accounting Estimates and Policies A summary of the Company’s significant accounting estimates and policies is included in Note 2, “Summary of Significant Accounting Policies” in our 2025 Annual Report. There were no significant changes in the Company’s application of its critical accounting policies during the six months ended June 30, 2026. Recently Issued and Adopted Accounting Pronouncements See Note 2, “Basis of Presentation” in Item 1 of this Quarterly Report on Form 10-Q for information regarding recently issued and adopted accounting pronouncements.