Schrödinger Reports First Quarter 2026 Financial Results

View all news 05/05/2026 First Quarter ACV of $28 Million, Representing 12% Growth Continued Momentum in Transition to Hosted Software Licensing Schrödinger to Launch Bunsen, an Agentic AI Co-Scientist, This Summer Lilly’s Announced $2.3 Billion Acquisition of Ajax Validates Schrödinger’s Track Record of High-Value Collaborations Schrödinger, Inc. (Nasdaq: SDGR) today announced financial results for the quarter ended March 31, 2026. “Our first quarter results show strong growth in both ACV and drug discovery revenue. ACV growth of 12 percent was driven by usage scale-ups and new deployments; we are also pleased with our progress transitioning customers to hosted licensing. The biopharmaceutical funding environment is improving, and the depth of customer engagement reflects the critical importance of our computational platform that integrates ground truth simulation with leading edge AI. We have a strong commitment to technology leadership and are excited about the release this summer of Bunsen, an agentic AI co-scientist designed to autonomously execute complex molecular discovery workflows and expand utilization to a broader user base,” said Ramy Farid, Ph.D., chief executive officer of Schrödinger. “We also continue to see the impact of our platform through the success of our co-founded companies. Lilly’s announced acquisition of Ajax Therapeutics, in which we have an approximately six percent equity stake, marks another multi-billion dollar acquisition of a Schrödinger co-discovered molecule. This milestone reinforces the strength of our platform, team and integrated business model.” First Quarter 2026 Operating and Financial Highlights (comparisons are to first quarter 2025, unless otherwise noted) ACV was $28.4 million, a 12% increase, and $201 million on a trailing four-quarter basis.Software revenue was $35.6 million, a 21% decrease, reflecting the company’s planned accelerated transition to hosted software licensing.Drug discovery revenue was $22.9 million compared to $10.2 million, due to the accelerated recognition of deferred revenue associated with the continued progress of the company’s collaboration portfolio and the discontinuation of one collaboration program.Contribution revenue was $0.1 million, compared to $4.3 million, primarily due to completion of the predictive toxicology grant.Total revenue was $58.6 million, a 2% decrease.Software gross margin was 69%, reflecting the company’s planned accelerated transition to hosted software licensing.Operating expenses were $78.3 million, a 4% decrease.Other expenses, which include changes in fair value of equity investments and interest income/expense, were $10.8 million.Net loss was $60.0 million, compared to $59.8 million.Cash, cash equivalents, restricted cash and marketable securities were $406 million at the end of the first quarter of 2026. Schrödinger now presents contribution revenue and cost of revenue separately from software and drug discovery revenue and cost of revenues. Prior periods have been reclassified to conform to this presentation to facilitate year-over-year comparability. 2026 Financial and Operational Outlook As of May 5, 2026, Schrödinger maintained its previously issued financial guidance for the fiscal year ending December 31, 2026: ACV is expected to range from $218 million to $228 million, representing 10-15% growth over 2025.Drug discovery revenue is expected to range from $55 million to $65 million.Operating expenses are expected to be less than 2025. For the second quarter of 2026, ACV is expected to range from $19 million to $23 million, exclusive of contribution ACV, compared to $23.3 million in the second quarter of 2025, which included $5.0 million of contribution ACV. Recent Highlights Platform Today Schrödinger announced plans for release of an early-access version of Bunsen, its new agentic AI co-scientist, this summer. Bunsen autonomously executes complex molecular discovery workflows, expanding the user base and enhancing productivity across Schrödinger’s industry-leading computational platform. Bunsen allows for greater throughput and utilization of Schrödinger’s predict-first approaches, accelerating discovery timelines and improving project outcomes. Schrödinger’s materials science and therapeutics teams have been using Bunsen internally to enhance productivity across research projects.In April, researchers at Schrödinger and Bristol Myers Squibb published the discovery of a series of potent sterile alpha and TIR motif containing 1 (SARM1) inhibitors as a potential treatment for neurodegenerative diseases. The inhibitors were identified through a unique workflow for free-energy perturbation (FEP+). This computational approach identified molecules with unique binding properties while establishing precise dose levels to optimize safety profiles.In March, researchers at Schrödinger and Lilly published a simulation method that predicts the viscosity and injectability of antibody-based drugs by mapping interactions between individual amino acids. This computational approach replaces resource-intensive physical experiments by identifying the specific points of contact where proteins interact with one another. By computationally determining how different additives improve drug consistency, the new method can significantly accelerate the development of subcutaneous treatments. Therapeutics Portfolio In April, Ajax Therapeutics, a company co-founded by Schrödinger, announced its sale to Lilly for up to $2.3 billion in cash, inclusive of an upfront payment and subsequent payments upon the achievement of certain clinical and regulatory milestones. AJ1-11095, an investigational, once-daily oral, first-in-class Type II JAK2 inhibitor, was designed in collaboration with Schrödinger. As of December 31, 2025, Schrödinger had a 5.8% equity stake in Ajax.Schrödinger is exploring strategic partnerships for mid-and late-stage development of SGR-1505, its differentiated MALT1 inhibitor, and SGR-3515, its Wee1/Myt1 dual inhibitor. In April, Schrödinger presented preliminary Phase 1 clinical data for SGR-3515 at the American Association for Cancer Research (AACR) Annual Meeting. The initial data demonstrated that SGR-3515 was generally well-tolerated on an intermittent dosing schedule and achieved a 65% disease control rate among evaluable participants at doses of 100 mg or higher. Data most recently presented at the American Society of Hematology (ASH) Annual Meeting demonstrated that SGR-1505 was generally well tolerated and clinically active in patients with relapsed/refractory B-cell malignancies, including a 100% response rate in patients with Waldenström macroglobulinemia (WM). SGR-1505 has FDA Fast Track and Orphan Drug Designations for WM. In March, Structure Therapeutics, a collaborator and company co-founded by Schrödinger, announced positive topline results from its Phase 2 clinical program for aleniglipron, its once-daily oral GLP-1 receptor agonist for the treatment of obesity. Schrödinger has an equity stake in Structure. Webcast and Conference Call Information Schrödinger will host a conference call to discuss its first quarter 2026 financial results on Tuesday, May 5, 2026, at 4:30 p.m. ET. The live webcast can be accessed under “Events & Presentations" in the investors section of Schrödinger’s website, https://ir.schrodinger.com/news-and-events/event-calendar. To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event. Non-GAAP Information Included in this press release is certain financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The company presents adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is defined as net income (loss) before interest, taxes, depreciation, amortization, and stock-based compensation expense, and further adjusted to exclude gains and losses on equity investments, changes in fair value of equity investments, restructuring costs, litigation and settlement expenses, and, when applicable, other non-recurring items that management does not consider indicative of ongoing operating performance. Management believes adjusted EBITDA is a useful measure for investors, taken in conjunction with the company’s GAAP financial statements because they provide greater period-over-period comparability with respect to the company’s operating performance, by excluding the effects of capital structure, tax impacts, non-cash depreciation and amortization, non-cash equity compensation expense, non-cash mark-to-market and other valuation adjustments for the company’s equity investments, non-recurring cash distributions from the company’s equity investments, and other non-recurring items that are not reflective of the ongoing performance of the business. However, adjusted EBITDA as a non-GAAP financial measure should be considered only in addition to, not as a substitute for or as superior to, net income (loss) or other financial measures prepared in accordance with GAAP. Other companies in Schrödinger’s industry may calculate adjusted EBITDA differently than Schrödinger does, limiting their usefulness as comparative measures. For a reconciliation of adjusted EBITDA to GAAP net income (loss), please refer to the tables at the end of this press release. About Schrödinger Schrödinger is transforming molecular discovery with its computational platform, which enables the discovery of novel, highly optimized molecules for drug development and materials design. Schrödinger’s software platform is built on more than 30 years of R&D investment and is licensed by biotechnology, pharmaceutical and industrial companies, and academic institutions around the world. Schrödinger also leverages the platform to advance a portfolio of collaborative and proprietary programs. To learn more, visit www.schrodinger.com, follow us on LinkedIn, or visit our blog, Extrapolations.com. Operating Metrics To supplement the financial measures presented in this press release and related conference call or webcast in accordance with generally accepted accounting principles in the United States (GAAP), Schrödinger also presents certain other performance metrics, such as annual contract value, or ACV, and ACV by certain industries and customer cohorts. Annual Contract Value (ACV). Schrödinger tracks the ACV for each customer. With respect to contracts that have a duration of one year or less, or contracts of more than one year in duration that are billed annually, ACV is defined as the contract value billed during the applicable period. For contracts with a duration of more than one year that are billed upfront, ACV in each period represents the total billed contract value divided by the term. ACV should be viewed independently of revenue and does not represent revenue calculated in accordance with GAAP on an annualized basis, as it is an operating metric that can be impacted by contract execution start and end dates and renewal rates. ACV is not intended to be a replacement for, or forecast of, revenue. ACV by Cohorts. Schrödinger tracks ACV by certain industries and customer cohorts. These cohorts include contribution, which consists of customers from which we derive contribution revenue. We present this ACV separately because it relates to grant agreements accounted for as non-exchange contributions, rather than commercial software contracts. The operating metrics for the cohorts are not prepared in accordance with GAAP and do not correspond to the company’s reportable segments or the allocation of costs for GAAP purposes. These metrics allow management to better understand differences in sales cycles, contract duration, deployment models, renewal behavior, and expansion opportunities among customer and industry groups, supplementing but not replacing Schrödinger’s GAAP results. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 including, but not limited to those statements regarding Schrödinger’s expectations about the speed and capacity of its computational platform, its financial outlook for the fiscal year ending December 31, 2026, and second quarter ending June 30, 2026, its plans to continue to invest in research and its strategic plans to accelerate the growth of its software licensing business and advance its collaborative and proprietary drug discovery programs, the long-term potential of its business, its ability to improve and advance the science underlying its platform, the initiation, timing, progress, and results of its proprietary drug discovery programs and product candidates and the drug discovery programs and product candidates of its collaborators, the clinical potential and favorable properties of SGR-1505 and SGR-3515, its MALT1 and Wee1/Myt1 inhibitors, its plans to explore strategic opportunities for the continued clinical development of SGR-1505 and SGR-3515, potential partnering and other business development activities for its programs, the clinical potential and favorable properties of its collaborators’ product candidates, expectations relating to the potential of, and the timing of release of, Bunsen, its agentic AI co-scientist, the ability for the company to realize potential benefits from its collaborative programs, including the amount and timing of additional milestones, if any, as well as expectations related to the use of its cash, cash equivalents and marketable securities. Statements including words such as “aim,” “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and statements in the future tense are forward-looking statements. These forward-looking statements reflect Schrödinger’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the company and on assumptions the company has made. Actual results may differ materially from those described in these forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and important factors that are beyond Schrödinger’s control, including the demand for its software platform, its ability to further develop its computational platform, its reliance upon third-party providers of cloud-based infrastructure to host its software solutions, its ability to transition customers to hosted software deployments, factors adversely affecting the life sciences industry, fluctuations in the value of the U.S. dollar and foreign currencies, its reliance upon its third-party drug discovery collaborators, the uncertainties inherent in drug development and commercialization, such as the conduct of research activities and the timing of and its ability to initiate and complete preclinical studies and clinical trials, whether results from preclinical studies will be predictive of the results of later preclinical studies and clinical trials, uncertainties associated with the regulatory review of investigational new drug application submissions, clinical trials and applications for marketing approvals, the ability to retain and hire key personnel and other risks detailed under the caption “Risk Factors” and elsewhere in the company’s Securities and Exchange Commission filings and reports, including its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the Securities and Exchange Commission on May 5, 2026, as well as future filings and reports by the company. Any forward-looking statements contained in this press release speak only as of the date hereof. Except as required by law, Schrödinger undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, changes in expectations or otherwise. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except for share and per share amounts) Three Months Ended March 31, 2026 2025 Revenues: Software products and services $ 35,560 $ 44,972 Drug discovery 22,879 10,236 Contribution 148 4,343 Total revenues 58,587 59,551 Cost of revenues: Software products and services 10,863 9,112 Drug discovery 16,310 14,452 Contribution 1,867 4,863 Total cost of revenues 29,040 28,427 Gross profit 29,547 31,124 Operating expenses: Research and development 43,824 45,844 Sales and marketing 11,603 10,367 General and administrative 22,914 25,802 Total operating expenses 78,341 82,013 Loss from operations (48,794 ) (50,889 ) Other (expense) income: Change in fair value of equity investments (13,487 ) (13,095 ) Other income 2,663 4,204 Total other expense (10,824 ) (8,891 ) Loss before income taxes (59,618 ) (59,780 ) Income tax expense 408 28 Net loss $ (60,026 ) $ (59,808 ) Net loss per share of common and limited common stockholders, basic and diluted: $ (0.81 ) $ (0.82 ) Weighted average shares used to compute net loss per share of common and limited common stockholders, basic and diluted: 73,989,137 73,057,916 Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except for share and per share amounts) Assets March 31, 2026 December 31, 2025 Current assets: Cash and cash equivalents $ 260,255 $ 230,517 Restricted cash 7,464 6,868 Marketable securities 138,704 164,947 Accounts receivable, net of allowance for doubtful accounts of $440 and $440 27,253 83,041 Unbilled and other receivables, net of allowance for unbilled receivables of $140 and $140 20,930 21,352 Prepaid expenses 9,353 12,540 Total current assets 463,959 519,265 Property and equipment, net 20,447 19,456 Equity investments 39,826 73,647 Goodwill 4,791 4,791 Right of use assets - operating leases 100,198 102,736 Other assets 4,966 6,265 Total assets $ 634,187 $ 726,160 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 11,945 $ 11,452 Accrued payroll, taxes, and benefits 24,776 39,264 Deferred revenue 103,111 112,853 Lease liabilities - operating leases 16,013 16,412 Other accrued liabilities 13,697 9,155 Total current liabilities 169,542 189,136 Deferred revenue, long-term 59,019 78,877 Lease liabilities - operating leases, long-term 90,943 92,816 Other liabilities, long-term 1,135 1,278 Total liabilities 320,639 362,107 Stockholders' equity: Preferred stock, $0.01 par value. Authorized 10,000,000 shares; zero shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively — — Common stock, $0.01 par value. Authorized 500,000,000 shares; 65,383,310 and 64,515,380 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively 654 645 Limited common stock, $0.01 par value. Authorized 100,000,000 shares; 9,164,193 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively 92 92 Additional paid-in capital 1,001,662 992,015 Accumulated deficit (688,832 ) (628,806 ) Accumulated other comprehensive (loss) income (28 ) 107 Total stockholders' equity 313,548 364,053 Total liabilities and stockholders' equity $ 634,187 $ 726,160 Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net loss $ (60,026 ) $ (59,808 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Change in fair value of equity investments 13,487 13,095 Depreciation and amortization 1,476 1,589 Stock-based compensation 9,073 11,574 Noncash investment accretion (664 ) (861 ) Loss on disposal of property and equipment 11 — Decrease (increase) in assets: Accounts receivable, net 55,788 215,345 Unbilled and other receivables 422 (6,332 ) Reduction in the carrying amount of right of use assets - operating leases 2,538 2,222 Prepaid expenses and other assets 4,486 (788 ) Increase (decrease) in liabilities: Accounts payable 455 1,344 Accrued payroll, taxes, and benefits (14,488 ) (20,616 ) Deferred revenue (29,600 ) (10,804 ) Lease liabilities - operating leases (2,272 ) (1,669 ) Other accrued liabilities 4,480 (228 ) Net cash (used in) provided by operating activities (14,834 ) 144,063 Cash flows from investing activities: Purchases of property and equipment (2,507 ) (596 ) Proceeds from disposition and sale of equity investments, net 20,334 — Purchases of marketable securities (34,055 ) (27,556 ) Proceeds from maturity of marketable securities 60,827 58,784 Net cash provided by investing activities 44,599 30,632 Cash flows from financing activities: Proceeds from issuances of common stock upon stock option exercises 583 423 Principal payments on finance leases (14 ) (14 ) Net cash provided by financing activities 569 409 Net increase in cash and cash equivalents and restricted cash 30,334 175,104 Cash and cash equivalents and restricted cash, beginning of period 237,385 162,657 Cash and cash equivalents and restricted cash, end of period $ 267,719 $ 337,761 Supplemental disclosure of cash flow and noncash information Cash paid for income taxes $ 266 $ 139 Supplemental disclosure of non-cash investing and financing activities Purchases of property and equipment in accounts payable 78 13 Purchases of property and equipment in accrued liabilities — 25 Reconciliation of GAAP Net Loss to Adjusted EBITDA (Unaudited) (in thousands) Three Months Ended March 31, 2026 2025 Net loss (GAAP) $ (60,026 ) $ (59,808 ) Change in fair value of equity investments 13,487 13,095 Other income (2,663 ) (4,204 ) Income tax expense 408 28 Depreciation and amortization 1,476 1,589 Stock-based compensation 9,073 11,574 Reorganization expense(a) 589 — Litigation and settlement expense(b) — 390 Adjusted EBITDA $ (37,656 ) $ (37,336 ) (a) Represents costs in connection with restructuring, consisting of severance payments, employee benefits, and related costs. (b) Represents costs related to a derivative action settlement which we do not consider to be representative of our underlying operating performance. Source: Schrödinger Multimedia Files: View all news