Financial Data and Key Metrics Changes - The company reported a record revenue of $99 million for Q4, representing a 17% year-over-year increase and marking the 11th consecutive quarter of growth [7] - For the full fiscal year 2025, revenue reached $376.6 million, a growth of 20% compared to fiscal 2024 [7][23] - Gross margin for Q4 was 51.3%, and for the full year, it was 50.7%, an increase from 42.6% in fiscal 2024 [7][23] Business Line Data and Key Metrics Changes - Synbio revenue for Q4 was $39.5 million, up 17% year-over-year, and for the full year, it increased to $145 million from $123.5 million in fiscal 2024 [8][23] - NGS revenue for Q4 grew to approximately $53 million, a 16% increase year-over-year, with full-year revenue at $208.1 million, reflecting a 23% growth [12][24] - Biopharma revenue for Q4 was $6.4 million, a 22% increase year-over-year, with full-year revenue at $23.5 million, a 15% growth [14][24] Market Data and Key Metrics Changes - Revenue from the Americas increased to approximately $57.3 million in Q4, a 9% year-over-year growth, while EMEA revenue rose to $34.6 million, a 35% increase [25] - APAC revenue increased to $7.2 million in Q4, a 9% year-over-year growth [25] Company Strategy and Development Direction - The company plans to combine Synbio and Biopharma revenue reporting under the term "DNA synthesis and protein solutions" to better reflect its customer base [16] - A focus on AI-driven drug discovery is expected to drive future growth, with significant orders from customers in this area [10][29] - The introduction of the MRD Express product is aimed at enhancing cancer diagnostics and treatment, with a commercial launch expected in early 2026 [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, particularly in AI-enabled drug discovery and the integration of Synbio and Biopharma services [10][32] - The company anticipates total revenues for fiscal 2026 to be between $425 million and $435 million, reflecting a growth of approximately 13% to 15.5% year-over-year [29] Other Important Information - The company ended fiscal 2025 with cash, cash equivalents, and short-term investments of approximately $232.4 million [28] - Adjusted EBITDA for Q4 was a loss of approximately $7.8 million, an improvement of $9.2 million compared to Q4 of fiscal 2024 [27] Q&A Session Summary Question: On gross margins and pricing - Management indicated that while they expect to maintain strong gross margins, specific customer mix may influence quarterly results [36][37] Question: NGS growth expectations - Management expects NGS growth to return to 20% by Q4, driven by customer transitions and new product introductions [38] Question: Sustainability of AI-driven biopharma orders - Management remains optimistic about the biopharma business, highlighting the close ties to Synbio offerings and the potential of AI [40][41] Question: Guidance for gross margins and NGS portfolio - Management anticipates improvements in gross margins throughout the year, driven by revenue growth and continuous process improvements [43][44] Question: Market opportunity definition - Management acknowledged the need for clearer market definitions and metrics to help investors understand growth potential [59][62]

Core Insights - Recursion reported business updates and financial results for Q3 2025, highlighting progress in its internal pipeline and strategic partnerships, with a strong cash position extending through the end of 2027 [1][3][19] Business Highlights - The company achieved over $500 million in upfront and milestone payments from partnerships, including a recent $30 million milestone from Roche and Genentech for a whole-genome map of microglial immune cells [3][8][12] - Recursion's internal pipeline includes several programs in oncology and rare diseases, with notable candidates such as REC-617 for advanced solid tumors and REC-7735 for HR+ breast cancer [4][6][13] - The company is advancing its clinical programs, with REC-4881 in the TUPELO study and REC-617 entering combination studies [6][13] Financial Performance - Total revenue for Q3 2025 was $5.2 million, a decrease from $26.1 million in Q3 2024, primarily due to the timing of milestone payments [19][24] - Research and development expenses increased to $121.1 million in Q3 2025 from $74.6 million in Q3 2024, driven by acquisitions and business combinations [19][20] - The net loss for Q3 2025 was $162.3 million, compared to a net loss of $95.8 million in Q3 2024, reflecting increased operational costs [25][26] Cash Position - As of October 9, 2025, Recursion had approximately $785 million in cash and cash equivalents, providing a runway through the end of 2027 without additional financing [8][19] - The company reported a cash position of $667.1 million as of September 30, 2025, an increase from $603.0 million at the end of 2024 [19][28] Strategic Partnerships - Recursion's collaboration with Roche and Genentech focuses on neuroscience and oncology, with ongoing projects and milestones expected to exceed $10 billion in potential future payments [12][18] - The partnership with Sanofi aims to develop up to 15 best-in-class programs across oncology and immunology, with significant milestone payment potential [18][19]