Supplemental Financial Information

3 Months Ended

Mar. 31, 2024

Supplemental Financial Information [Abstract]

Tempus agreement

In November 2023, Recursion entered into a five-year agreement with Tempus Labs, Inc. (Tempus) to purchase access to their records of patient-centric multimodal oncology data and use rights for therapeutic development purposes. This data will be used to improve the training of Recursion’s artificial intelligence and machine learning models and is expected to accelerate Recursion’s drug discovery process. Recursion is making annual payments, ranging between $22.0 million and $42.0 million, up to $160.0 million in aggregate, to Tempus in cash or equity at the Company’s option. The equity value is determined by using the seven-trading day period dollar volume-weighted average price (VWAP) for Recursion Class A common stock ending on the day immediately preceding the date that is five business days prior to the payment date.

Recursion is expensing the record purchases as “Research and Development” expenses in the Condensed Consolidated Statements of Operations as the records are purchased. To the extent that the Recursion payments to Tempus are greater than or less than the records purchased amount, Recursion records the applicable amount to “Other Current Assets” or “Accrued Expenses and Other Liabilities” on the Condensed Consolidated Balance Sheet, respectively. As of March 31, 2024, Recursion had recorded $16.0 million within “Other Current Assets” on the Consolidated Balance Sheet related to the Tempus agreement.

Property and Equipment


	March 31,		December 31,
(in thousands)	2024		2023
Lab equipment	$	61,247	$	60,096
Leasehold improvements	46,289		45,929
Office equipment	22,356		22,126
Construction in progress	5,677		3,231
Property and equipment, gross	135,569		131,382
Less: Accumulated depreciation	(48,853)		(44,872)
Property and equipment, net	$	86,716	$	86,510

Depreciation expense on property and equipment was $4.0 million and $3.6 million during the three months ended March 31, 2024 and 2023, respectively. The Company recorded an insignificant impairment and an impairment of $1.2 million during the three months ended March 31, 2024 and 2023, respectively, related to construction projects for leasehold improvements as the Company no longer intended to use them. The impairment was recorded in “General and Administrative” in the Condensed Consolidated Statements of Operations.

For the three months ended March 31, 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.

Accrued Expenses and Other Liabilities


	March 31,		December 31,
(in thousands)	2024		2023
Accrued compensation	$	10,055	$	22,888
Accrued development expenses	5,804		6,077
Accrued early discovery expenses	2,610		2,570
Accrued construction	—		2,439
Materials received not invoiced	1,184		2,432
Accrued other expenses	6,417		10,229
Accrued expense and other liabilities	$	26,070	$	46,635

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 March 31, 2024, the outstanding balance was $616 thousand.

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 March 31, 2024, the outstanding balance was $510 thousand.

Interest Income, net


	Three months ended March 31,
(in thousands)	2024		2023
Interest income	$	4,048	$	4,660
Interest expense	(20)		(19)
Interest income, net	$	4,028	$	4,641

For the three months ended March 31, 2024 and 2023, 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.