RECURSION PHARMACEUTICALS, INC.RXRX

RECURSION PHARMACEUTICALS, INC. Stock Compensation Disclosure

10-KFiled Feb 25, 20263 min read
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). 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 December 31, 2025, 14.0 million shares of Class A common stock were available for grant in the 2021 plan. In 2024, the Board of Directors and the stockholders of the Company adopted the 2024 Inducement Equity Incentive Plan (the 2024 Plan) as part of the Exscientia acquisition. See Note 4, “Acquisitions” for additional information. As of December 31, 2025, 11.7 million shares of Class A common stock were available for grant in the 2024 plan.

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

Years ended December 31,
(in thousands)
202520242023
Cost of revenue
$5,721 $3,636 $5,326 
Research and development61,646 36,184 21,992 
General and administrative42,651 39,681 24,361 
Total$110,018 $79,501 $51,679 

As part of the Exscientia acquisition, Recursion issued replacement grants for the Exscientia legacy awards. Recursion recorded $8.5 million of additional one-time stock compensation expense during the year ended December 31, 2024. See Note 4, “Acquisitions” for additional information on the Exscientia acquisition.
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 year ended December 31, 2025 was as follows:

 (in thousands except share and per share amounts)
Shares 
Weighted-Average Exercise
Price
Weighted-Average Remaining Contractual Life (in years)
Aggregate
Intrinsic
Value
Outstanding as of December 31, 202421,941,495 $5.40 7.9$62,685 
Granted3,510,673 6.98 
Cancelled(3,056,772)9.16 
Exercised(5,079,675)1.03 26,874 
Outstanding as of December 31, 202517,315,721 $6.53 7.3$13,713 
Exercisable as of December 31, 202510,053,299 $6.53 6.3$10,431 

As part of the Exscientia acquisition, Recursion granted 5.8 million stock option awards related to the Exscientia legacy awards in 2024.

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 years ended December 31, 2025, 2024 and 2023 were $4.42, $5.64 and $5.64, respectively.

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

Years ended December 31,
 202520242023
Expected term (in years)
6.24.05.8
Expected volatility
65%65%66%
Expected dividend yield
— — — 
Risk-free interest rate
4.4%4.3%3.6%

As of December 31, 2025, $31.8 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 year ended December 31, 2025:

Stock unitsWeighted-average grant date fair value
Outstanding as of December 31, 202427,304,229$7.47 
Granted15,706,6855.84
Vested(9,600,592)7.42
Forfeited(5,920,397)7.48
Outstanding as of December 31, 202527,489,925$6.55 
As part of the Exscientia acquisition, Recursion granted 1.6 million RSU awards related to the Exscientia legacy awards in 2024. Additionally, Recursion granted 8.0 million RSU awards as part of a retention program for Exscientia employees in 2024.

The fair market value of RSUs vested was $71.2 million during the year ended December 31, 2025. As of December 31, 2025, $167.6 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over approximately the next three years.

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

Other Available Disclosures

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