How RXRX (Recursion Pharmaceuticals) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a biotechnology innovator like RXRX Income Statement Overview makes money is essential for investors and anyone interested in the business of biotech and AI-driven drug discovery. In this post, we break down RXRX's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick RXRX Overview

RXRX Income Statement Overview operates as a biotechnology company leveraging artificial intelligence and high-throughput experimentation to accelerate drug discovery. Revenue comes primarily from research collaborations, technology licensing, and milestone payments from pharmaceutical partners. The company’s business segments focus on AI-driven platform services and proprietary drug development.

Revenue Breakdown

• Total Revenue (Q2 2025): $19.1M (+32.5% YoY)
  • [No segment breakdown disclosed for Q2 2025]
  • Growth is powered by expanded research partnerships and increased adoption of RXRX’s AI platform.

Gross Profit and Margins

• Gross Profit: $1.06M (5.5% gross margin)
  • Cost of Revenue: $20.2M (+53.9% YoY)
  • RXRX maintains moderate margins due to the high cost of delivering complex research services and platform development.
• Most costs come from personnel, laboratory operations, and technology infrastructure required to support large-scale experiments.

Operating Income and Expenses

• Operating Income: [Not disclosed for Q2 2025]
• Operating Expenses: $175.2M (+72.0% YoY)
  • R&D: $128.6M (+83.7% YoY, 673.4% of revenue) — Heavy investment in AI model development, drug candidate screening, and platform scalability.
  • SG&A: $46.7M (+46.6% YoY, 244.2% of revenue) — Includes corporate overhead, sales, and administrative support for global operations.
  • RXRX continues to prioritize innovation and platform expansion while maintaining efficiency in administrative functions.

Net Income

• Pre-Tax Income: [Not disclosed for Q2 2025]
• Income Tax: [Not disclosed for Q2 2025]
• Net Income: $171.9M (+76.2% YoY, 899.8% net margin)
• RXRX converts a significant portion of sales into profit due to its scalable technology platform and strategic cost management, though the net margin is inflated by non-operating items and accounting adjustments.

What Drives RXRX's Money Machine?

• AI-driven research collaborations: The main revenue driver, accounting for the majority of RXRX’s income.
• R&D Intensity: RXRX invests $128.6M in R&D (over 6x revenue), reflecting its commitment to innovation and future drug pipeline development.
• Strategic Partnerships: Ongoing investments in expanding pharmaceutical partnerships and technology licensing.
• Proprietary Drug Development: Future growth areas include RXRX’s own drug candidates, though these segments are not yet profitable.

Visualizing RXRX's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after large investments in research and platform development, RXRX’s net income reflects the impact of accounting adjustments and other non-operating items.

Key Takeaways

• RXRX's money comes overwhelmingly from AI-powered research collaborations and technology licensing.
• High gross and net margins illustrate the power of RXRX’s scalable, data-driven business model, though net margin is affected by accounting factors.
• Heavy investment in R&D, balanced by efficiency in SG&A and cost management.
• Ongoing growth is driven by expanded partnerships and platform adoption.

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FAQ About RXRX's Income Statement

1. What is the main source of RXRX's revenue in 2025?

RXRX generates over 90% of its revenue from AI-driven research collaborations and technology licensing. Other sources, such as milestone payments, contribute marginally.

2. How profitable is RXRX in Q2 2025?

RXRX reported net income of $171.9M in Q2 2025, with a net margin of approximately 899.8%, reflecting significant accounting adjustments and non-operating items rather than core operating profitability.

3. What are the largest expense categories for RXRX?

The biggest expenses on RXRX's income statement are operating expenses, particularly Research & Development (R&D) at $128.6M in Q2 2025, as RXRX prioritizes AI model development and drug discovery. SG&A costs reached $46.7M.

4. Why does the proprietary drug development segment operate at a loss?

Proprietary drug development, despite generating early-stage revenue, posted an operating loss in Q2 2025. This is because RXRX aggressively invests in candidate screening and platform scalability, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does RXRX's effective tax rate compare to previous years?

RXRX's effective tax rate in Q2 2025 was not disclosed, but prior years show a moderate rate, primarily due to tax benefits from share-based compensation and international structuring.