Schrodinger Inc (SDGR) Q4 2025 Earnings Call Highlights: Strong Revenue Growth Amid Transition …

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Thu, February 26, 2026 at 2:03 PM GMT+9 4 min read

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**Total Revenue:** $256 million, representing 23% growth.

**Software Revenue:** $199.5 million.

**Drug Discovery Revenue:** $56.4 million.

**Cash Position:** $402 million.

**Software Gross Margin:** 74%, down from 80% in 2024.

**Total Operating Expenses:** $310 million, a decrease of approximately 9% compared to 2024.

**Net Loss:** $103 million, compared to a net loss of $187 million in 2024.

**Annual Contract Value (ACV):** $198.5 million, a 4% increase from 2024.

**Top 20 Pharma ACV Growth:** 15%.

**Commercial ACV Growth:** 7% to $177.4 million.

**Net Dollar Retention:** 100%.

**Gross Dollar Retention:** 96%.

**Materials Science Revenue:** Increased from $15 million to $17 million.

**2026 ACV Guidance:** $218 million to $228 million, representing 10% to 15% growth.

**2026 Drug Discovery Revenue Guidance:** $55 million to $65 million.

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Release Date: February 25, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Schrodinger Inc (NASDAQ:SDGR) reported a strong financial performance in 2025 with a 23% total revenue growth, despite challenging market conditions.

The company has a robust cash position of $402 million, providing a solid foundation for future growth and investment.

Schrodinger Inc (NASDAQ:SDGR) is making significant progress in transitioning to a hosted model, which is expected to result in more predictable revenue streams.

The company is leveraging its unique computational platform that integrates physics and AI, positioning it as a leader in molecular discovery.

Schrodinger Inc (NASDAQ:SDGR) has a diverse ecosystem of collaborations and partnerships, which has led to successful drug discovery and financial outcomes.

Negative Points

The transition to a hosted model is expected to result in reduced revenue recognition in the short term, impacting gross margins and adjusted EBITDA.

The company experienced a decrease in software gross margin from 80% in 2024 to 74% in 2025 due to higher costs associated with contribution revenue from grants.

Net dollar retention fell to 100% from an average of over 110% in previous years, reflecting a challenging environment for pharma and biotech in 2025.

The transition to hosted contracts may lead to interim variability in revenue, as revenue recognition will be spread over the duration of contracts.

Schrodinger Inc (NASDAQ:SDGR) is facing a challenging biotech funding environment, which has impacted its ability to expand relationships and grow revenue.

 






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Q & A Highlights

Q: Can you discuss the strategic approach to partnering out assets in your pipeline and its potential impact on achieving the 2028 profit metric? A: Karen Akinsanya, President, Head of Therapeutics R&D and Chief Strategy Officer, Partnerships, explained that partnering is an ongoing and active component of Schrodinger’s business. The company regularly collaborates and licenses programs from its wholly owned portfolio. Richie Jain, CFO, added that achieving profitability by 2028 depends on software business growth of 10% to 15% annually, $50 million in drug discovery revenue per year, and continued operating expense discipline.

Q: How does the predictive toxicology platform factor into your growth projections? A: Richie Jain, CFO, stated that the growth expectations over the next three years include the impact of new products like the predictive toxicology platform. The platform has outperformed expectations in beta testing, and its launch is expected to contribute to growth, although specific incremental growth from this platform is not separately quantified in the 10% to 15% growth target.

Q: Can you explain the dynamics of the first quarter ACV relative to the full year ACV on the software side? A: Richie Jain, CFO, noted that Q1 tends to be smaller following the Q4 season due to customer budgeting cycles and contract renewal dates. ACV reflects the value of deals closed in the quarter, whereas revenue includes deals from prior quarters. The company expects 10% to 15% ACV growth for the full year, with Q4 being the largest booking period.

Q: How are customers reacting to the transition to a hosted platform? A: Richie Jain, CFO, explained that customers increasingly prefer hosted deployments, which allow for faster deployment and enhanced support. The transition to hosted solutions is expected to result in smoother and more predictable revenue, with a target of 75% hosted revenue by 2028.

Q: How does Schrodinger’s AI strategy align with pharma customers’ needs? A: Schrodinger views AI as a tailwind, with increased demand for their software due to AI adoption. The company is working with partners like Anthropic to integrate agentic AI with their computational solutions, which is expected to drive further adoption and demand for Schrodinger’s technology.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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