SDGR

Interested in Schrodinger, Inc.? Here are five stocks we like better. Second-quarter ACV rose 27% year over year to $29.6 million, driven by broader demand from pharmaceutical, biotech and materials-science customers. Revenue reached $58.9 million, while net income improved to $6 million from a $43 million loss a year earlier. Schrödinger launched early access for Bunsen, an agentic AI co-scientist, and signed a strategic software agreement with Bristol Myers Squibb. The company is also seeing growth from new offerings including Predictive Toxicology and RetroSynth. Management maintained 2026 ACV guidance of $218 million to $228 million but raised drug-discovery revenue guidance to $65 million-$75 million, reflecting a $10 million Ajax Therapeutics collaboration milestone. 3 Momentum Stocks That Could Soar Post-Market Volatility Schrodinger (NASDAQ:SDGR) said second-quarter annual contract value growth accelerated as demand broadened across large pharmaceutical customers, biotechnology companies and materials-science customers, while the company launched early access for Bunsen, its agentic AI co-scientist. Second-quarter ACV was $29.6 million, up 27% from a year earlier. ACV excluding contribution revenue was $22.6 million, an increase of 23% year over year and at the upper end of the company’s expectations, Chief Financial Officer Richie Jain said. First-half ACV totaled $58 million, representing 19% growth from the comparable 2025 period, while trailing four-quarter ACV reached $208 million. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control AI Pharma: 2 Paths to AI-Powered Drug Investment “The biopharma industry is increasingly recognizing that a computationally driven predict-first approach is a critical driver for accelerating drug discovery timelines and improving probabilities of success,” President and CEO Ramy Farid said. Total revenue for the second quarter was $58.9 million. Software revenue was $32.5 million, including $15.2 million of hosted revenue, or 47% of the software total. That compared with hosted revenue representing 31% of software revenue in the second quarter of 2025. → 3 Drone Stocks That Should Soar After the Summer Slump Simulations Plus Stock Drops 15% Despite EPS Beat Jain said the company’s planned transition toward hosted licenses continues to affect reported revenue growth because hosted-contract revenue is recognized ratably over the contract term rather than primarily upfront. Schrodinger said each 1-percentage-point increase in hosted revenue can temporarily reduce reported revenue by $2 million to $3 million, depending on renewal timing and contract duration. Software gross margin was 71%, compared with 76% a year earlier, reflecting the hosted-licensing transition. Contribution revenue was $3.4 million, down from $4.8 million in the prior-year quarter, primarily because initial Gates Foundation funding for the company’s Predictive Toxicology initiative had been completed. The decline was partly offset by a Gates Ventures grant supporting battery research. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Drug discovery revenue increased to $23 million from $13.9 million in the prior-year period, primarily due to a $10 million collaboration milestone from Ajax Therapeutics. Total other income was $48.9 million, primarily associated with the completion of Eli Lilly’s acquisition of Ajax. Operating expenses declined 6% year over year to $74 million, which Jain attributed to lower headcount, contract research organization costs and professional-services fees. The company reported net income of $6 million, compared with a net loss of $43 million in the second quarter of 2025, and ended the quarter with $419 million in cash and marketable securities. Schrodinger launched Bunsen in early access during the quarter. Farid described the product as an AI co-scientist designed to execute the company’s validated computational methods and complex multistep workflows. The company said Bunsen can help computational chemists work more efficiently while enabling more drug hunters to use advanced simulations. Bristol Myers Squibb, a longtime customer and collaborator, is deploying Bunsen and expanding use of Schrodinger’s platform across its research organization under a new strategic software agreement. The agreement combines Bunsen with the company’s computational technologies for large-scale chemical exploration. Farid said the company expects to capture value from increased use of its platform through its throughput-based licensing model. He also said collaborations with NVIDIA and Google Cloud are providing additional tools and compute resources for Bunsen’s early-access program. Management said Bunsen is already being used internally in the therapeutics organization. Karen Akinsanya, president, head of therapeutics research and development, and chief strategy officer for partnerships, said the AI system has accelerated workflows involving target analysis, structural biology, and analysis of DMPK, pharmacology and toxicology data. Chief Technology and COO Pat Lorton said Bunsen can monitor computational jobs, identify failures and attempt restarts, potentially improving utilization of computing resources outside normal working hours. Schrodinger cited its Predictive Toxicology solution as an emerging contributor to ACV growth. The technology is intended to predict off-target binding risks before synthesis, allowing customers to address potential safety issues earlier in drug discovery. Farid said commercial evaluations are progressing well, though the company did not disclose the specific ACV contribution from the product. Farid also identified RetroSynth as another new product contributing to growth and said it is included in the Bristol Myers Squibb agreement. He said new products, along with increased usage by existing customers, are a major component of the company’s growth strategy. On market conditions, Farid said the biotechnology sector has improved compared with last year. He pointed to an increase in biotechnology IPO activity and said the company has seen fewer customers struggling to raise funds than it did in 2025. Schrodinger maintained its full-year 2026 ACV guidance of $218 million to $228 million, representing growth of 10% to 15% from 2025. Jain noted that the fourth quarter is typically the company’s largest ACV quarter and generally accounts for more than half of annual ACV. The company raised its full-year drug discovery revenue outlook to $65 million to $75 million, from a prior range of $55 million to $65 million, reflecting recognition of the Ajax milestone. It expects 2026 operating expenses to be lower than in 2025. For the third quarter, Schrodinger expects ACV excluding contribution of $41 million to $45 million, compared with $38.3 million in the third quarter of 2025, which included $2.2 million of contribution ACV. Akinsanya also highlighted Schrodinger’s July collaboration with Simcere Pharmaceutical Group, under which the company is eligible for development and commercial milestones and tiered royalties on net sales. She said the company has realized more than $750 million from therapeutic activities since 2020, including collaborations, co-invented drugs and co-founded companies. She also cited phase I data presented in June for Ajax asset AJ11095, a Type II JAK inhibitor, as initial clinical evidence supporting its intended differentiated target profile. Schrödinger, Inc is a life sciences and materials discovery company that specializes in the application of physics-based computational platforms to accelerate drug discovery and advanced materials design. Founded in 1990 by Professor Richard A. Friesner, Schrödinger has developed a suite of proprietary software tools—such as Maestro for molecular modeling, Glide for molecular docking and Jaguar for quantum chemistry calculations—that enable scientists to predict molecular behavior with high accuracy. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Schrodinger Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Schrodinger, Inc. (SDGR) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of a loss of $0.6 per share. This compares to a loss of $0.59 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +113.33%. A quarter ago, it was expected that this company would post a loss of $0.56 per share when it actually produced a loss of $0.81, delivering a surprise of -44.64%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Schrodinger, which belongs to the Zacks Medical Info Systems industry, posted revenues of $58.89 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 15.58%. This compares to year-ago revenues of $54.76 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Schrodinger shares have lost about 12.5% since the beginning of the year versus the S&P 500's gain of 13%. While Schrodinger has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Schrodinger was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.64 on $51.84 million in revenues for the coming quarter and -$1.89 on $230.28 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Info Systems is currently in the top 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Phreesia (PHR), has yet to report results for the quarter ended July 2026. This developer of health care software is expected to post quarterly earnings of $0.11 per share in its upcoming report, which represents a year-over-year change of +1000%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Phreesia's revenues are expected to be $129.63 million, up 10.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Schrodinger, Inc. (SDGR) : Free Stock Analysis Report Phreesia, Inc. (PHR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. ACV: $29.6 million in Q2 2026, representing 27% year-over-year growth; ACV excluding contribution was $22.6 million, up 23%. Trailing Four-Quarter ACV: Reached $208 million; first half 2026 ACV of $58.0 million, up 19% year over year. Total Revenue: $58.9 million for Q2 2026. Software Revenue: $32.5 million, with hosted revenue contributing $15.2 million, or 47% of software total (up from 31% in Q2 2025). Software Gross Margin: 71% for the quarter, compared to 76% in Q2 2025. Drug Discovery Revenue: $23 million, up from $13.9 million in Q2 2025, primarily due to a $10 million collaboration milestone from Ajax Therapeutics. Contribution Revenue: $3.4 million, down from $4.8 million in Q2 2025. Operating Expenses: $74 million in Q2, a 6% decrease from $79 million in Q2 2025. Net Income: $6 million, compared to a net loss of $43 million in Q2 2025. Cash and Marketable Securities: $419 million at quarter end. Fully Diluted Share Count: $75.8 million. Full Year 2026 Guidance: ACV expected between $218 million and $228 million (10% to 15% growth); drug discovery revenue guidance raised to $65 million to $75 million. Q3 2026 ACV Guidance: Excluding contribution, expected to be $41 million to $45 million. Warning! GuruFocus has detected 4 Warning Signs with SDGR. Is SDGR fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ACV growth of 27% in Q2 2026, driven by broad-based demand across large pharma, biotech, and materials science customers. Successful launch of Bunsen, an agentic AI co-scientist, with early access and a strategic deployment agreement with Bristol Myers Squibb, expanding platform usage. Predictive toxicology solution is gaining traction, with commercial evaluations going well and already contributing to 2026 ACV. Strong balance sheet with $419 million in cash and marketable securities, providing financial stability for strategic initiatives. Drug discovery revenue increased significantly to $23 million in Q2 2026, driven by a $10 million collaboration milestone from Ajax Therapeutics, and full-year guidance raised to $65-$75 million. Operating expenses decreased 6% year-over-year, reflecting disciplined expense management and improved efficiency. Therapeutics portfolio continues to generate value, with over $750 million realized since 2020, including recent milestones from the Lilly-Ajax acquisition. Hosted revenue percentage increased to 47% of software revenue, indicating successful transition to recurring revenue model. Improved biotech sector conditions, with increased IPO activity and reduced customer funding challenges compared to the prior year. New global collaboration with Simcere Pharmaceutical Group to advance discovery programs into clinical stages, with potential for milestones and royalties. Software gross margin declined to 71% in Q2 2026 from 76% in Q2 2025, due to the accelerated transition to hosted licensing. Contribution revenue decreased to $3.4 million in Q2 2026 from $4.8 million in Q2 2025, due to completion of initial Gates Foundation funding for predictive toxicology. Total revenue growth is negatively impacted by the planned transition to hosted licenses, which recognizes revenue ratably over contract life. The company expects a temporary negative impact on reported revenue from the hosted transition, with each 1% increase in hosted revenue reducing revenue by $2-$3 million. Full-year ACV guidance remains at 10%-15% growth, which is lower than the 27% growth seen in Q2, indicating potential slowdown in the second half. Predictive toxicology and other new products have long lead times for customer adoption, requiring extensive evaluation and validation, which may delay revenue contributions. The company's reliance on a few large customers, such as BMS, for significant platform deployments could concentrate risk. Operating expenses, while reduced, remain high at $74 million for the quarter, and the company expects them to be less than 2025 but still substantial. The drug discovery revenue increase is partly due to a one-time milestone payment, which may not be recurring. The company's net income was boosted by a one-time gain from the Lilly-Ajax acquisition, which may not be sustainable in future quarters. Q: Can you provide more color on end market health in biopharma and biotech, as well as customer activity overall? How much has predictive tox contributed to ACV so far, and what are the expectations for that going forward? A: Ramy Farid (CEO) noted that the biotech sector is healthier this year than last, citing a doubling of IPOs and fewer companies struggling to raise funds. Regarding predictive tox, he stated the company is not disclosing the specific ACV breakdown by product, but confirmed it has contributed to ACV this year and is included in the full-year guidance. Q: What does the pipeline look like for Bunsen, and can you provide details on the pricing model? Is it similar to the rest of the software? A: Ramy Farid (CEO) highlighted the new agreement with Bristol Myers Squibb (BMS), a longtime customer, which significantly scaled up their access to the technology. He explained that the value of Bunsen is recognized through increased demand for their core technologies, as demonstrated by the BMS collaboration, rather than a separate pricing model. Q: As you convert customers to hosted licenses, what is the feedback? Can you achieve a majority of conversions within the first two years, or will it take longer? A: Richie Jain (CFO) confirmed the company is on track to reach its goal of 75% hosted revenue by the end of 2028. He noted that the hosted revenue percentage reached 47% this quarter, partly due to some customers transitioning early, and that customer engagement has been strong. Q: How much of the ACV growth is a function of new product launches, and what areas should we expect for the next wave of product launches to unlock more budget? A: Ramy Farid (CEO) stated that new products are a major contributor to growth in the first half of the year and are expected to remain so in the second half. He cited predictive tox and RetroSynth as examples, noting that the company's R&D group continuously develops new products based on feedback from its internal therapeutics group and thousands of users. Q: Can you talk about the areas where you are able to gain efficiencies and reduce operating expenses? A: Richie Jain (CFO) explained that operating expenses decreased 6% year-over-year and sequentially, driven by reductions in personnel costs, CRO costs, and professional services fees. This reflects the company's disciplined expense management and execution against its plans. Q: Can you speak to the specific areas of your workflows where you are seeing the greatest benefits from Bunsen? A: Karen Akinsanya (President, Head of Therapeutics R&D) highlighted that Bunsen is accelerating structure-based drug design workflows, including analyzing structures and binding sites. Ramy Farid (CEO) added that Bunsen acts as a true co-scientist, enabling users to run multiple tasks in parallel and handle routine tasks, significantly boosting efficiency. Patrick Lorton (CTO) noted that Bunsen can monitor and restart failed jobs, preventing the loss of overnight or weekend work on expensive supercomputers. Q: Does the 10% to 15% medium-term growth expectation factor in assumptions about predictive tox? How are you thinking about predictive tox relative to the core software business? A: Ramy Farid (CEO) reiterated that the company is not breaking down the growth component tied to predictive tox but confirmed that evaluations are going well and there is real demand. He noted that safety issues are a major source of drug discovery failures, and predictive tox addresses this. He expects the technology to contribute to growth for several years, given the typical long lead time for customers to evaluate and validate new technologies. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Second Quarter ACV of $30 Million, Representing 27% Growth Launched Early Access Version of Bunsen, A New Agentic AI Co-Scientist for Molecular Discovery NEW YORK, August 05, 2026--(BUSINESS WIRE)--Schrödinger, Inc. (Nasdaq: SDGR) today announced financial results for the quarter ended June 30, 2026. "We are very pleased with our second quarter results, delivering ACV of $29.6 million, which represents 27% growth. Our results reflect growing industry adoption of a predict-first approach to molecular discovery," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "As biopharma navigates a rapidly evolving AI landscape and mounting pressure to optimize and accelerate the discovery of new medicines, the need to generate ground-truth data has never been greater. By integrating our highly accurate, physics-based simulations with AI, and launching our agentic co-scientist Bunsen, we are enabling teams to execute complex workflows on a large scale and building the definitive computational infrastructure for the future of drug discovery." Second Quarter 2026 Operating and Financial Highlights (comparisons are to second quarter 2025, unless otherwise noted) ACV was $29.6 million, a 27% increase, and $208 million on a trailing four-quarter basis. ACV excluding contribution ACV was $22.6 million, a 23% increase, and $196 million on a trailing four-quarter basis. Software revenue was $32.5 million, a 10% decrease, primarily reflecting continued progress in the company’s accelerated transition to hosted software licensing. Hosted revenue was 47% of total software revenue, and 30% on a trailing four-quarter basis. Drug discovery revenue was $23.0 million compared to $13.9 million, primarily due to the achievement of a $10 million collaboration milestone associated with the Ajax Therapeutics acquisition. Contribution revenue was $3.4 million, compared to $4.8 million, primarily due to timing of revenue associated with the Gates Foundation predictive toxicology and Gates Ventures battery project grants. Total revenue was $58.9 million, an 8% increase. Software gross margin was 71%, reflecting the company’s planned accelerated transition to hosted software licensing. Operating expenses were $74.0 million, a 6% decrease. Other income, which includes changes in fair value of equity investments and interest income/expense, was $48.9 million primarily due to a gain associated with the completion of Eli Lilly and Company’s acquisition of Ajax Therapeutics. Net income was $6.0 million, compared to a net loss of $43.2 million. Cash, cash equivalents, restricted cash and marketable securities were $418.8 million. Schrödinger 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 August 5, 2026, Schrödinger provided the following 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 $65 million to $75 million, compared to the prior expectation of $55 million to $65 million, due to the achievement of a $10 million collaboration milestone associated with the Ajax acquisition. Operating expenses are expected to be less than 2025. For the third quarter of 2026, ACV is expected to range from $41 million to $45 million, excluding contribution ACV, compared to $38.3 million in the third quarter of 2025, which included $2.2 million of contribution ACV. Recent Highlights Schrödinger launched the early access version of Bunsen, its new agentic AI co-scientist. Unlike general-purpose agents, Bunsen is optimized to execute Schrödinger's validated, physics-based computational platform to plan and execute complex molecular discovery workflows and interpret results. Bunsen helps computational chemists run concurrent research sessions and accomplish more across multiple programs. Bunsen also makes advanced computational methods accessible to drug hunters who are not experienced computational chemists, further expanding the user base for the company’s computational platform. To accommodate the expected increase in throughput enabled by Bunsen and support early adoption, long-time collaborators NVIDIA and Google Cloud will provide a full stack AI platform, infrastructure, and access to the NVIDIA BioNeMo Agent Toolkit for early customers. Schrödinger announced a strategic software agreement with Bristol Myers Squibb (BMS) to deploy Bunsen, significantly expanding the scale of Schrödinger’s platform within BMS’s research organization and empowering scientists to explore more scientific possibilities, prioritize the most promising molecules with greater confidence, and accelerate discovery decisions. Schrödinger will collaborate with BMS scientists on developing novel functionality within Bunsen in conjunction with its computational technologies designed to enable large-scale chemical exploration as well as with RetroSynth, its AI-driven synthesis planning platform. Schrödinger announced a global drug discovery and development collaboration with Simcere Pharmaceutical Group to advance an innovative program based on unmet clinical needs. Schrödinger is leveraging its physics-based computational platform to lead drug design and optimization during the joint research phase, while Simcere will lead subsequent preclinical and clinical development. Schrödinger is eligible to receive discovery, development, and commercial milestone payments, as well as tiered royalties on net sales. Schrödinger scientists published research in the Journal of Chemical Information and Modeling validating the use of the FEP+ framework to accurately predict binding affinity and optimize macrocycles and cyclic peptides. The study evaluated over 230 unique compounds across five diverse and highly challenging therapeutic targets. The publication highlights how Schrödinger’s platform can successfully derisk the drug design process, allowing discovery teams to bypass low-probability chemical synthesis, substantially compress development timelines, and drive cost-effective pipeline advancements for historically "undruggable" targets. Schrödinger researchers published research in the Journal of Chemical Information and Modeling introducing a new workflow that combines mixed solvent molecular dynamics simulations with SiteMap, the company’s binding site identification software, to identify hidden, or cryptic, protein binding sites. Tested across a 65 target site dataset, this approach correctly identified the hidden pocket in the top predictions in nearly 80% of cases, expanding the ability to target previously undruggable proteins. Webcast and Conference Call Information Schrödinger will host a conference call to discuss its second quarter 2026 financial results on Wednesday, August 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. We present ACV as a supplemental operating metric because it provides a consistent measure of the underlying performance of our software business that is not affected by differences in revenue recognition timing across contract types, delivery models, or billing structures. 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 third quarter ending September 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 the drug discovery programs and product candidates of its collaborators, the clinical potential and favorable properties of its collaborators’ product candidates, expectations relating to the potential of, and the use of, Bunsen, its agentic AI co-scientist, including researchers’ ability to utilize a full stack AI platform provided by NVIDIA and Google Cloud with Bunsen to scale their use of the platform and the successful deployment of Bunsen within BMS’s research organization, the ability for the company to realize potential benefits from its collaborations, 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, 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 June 30, 2026, filed with the Securities and Exchange Commission on August 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805908510/en/ Contacts Jaren Madden (Investors and Media)Schrödinger, [email protected] 617-286-6264 Matthew Luchini (Investors)Schrödinger, [email protected] 917-719-0636 Rebecca Pocock (Media)SHIFT [email protected]

It's been a pretty great week for Schr￶dinger, Inc. (NASDAQ:SDGR) shareholders, with its shares surging 11% to US$13.28 in the week since its latest first-quarter results. Revenues came in 23% better than analyst models expected, at US$59m, although statutory losses ballooned 29% to US$0.81, which is much worse than what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Taking into account the latest results, the current consensus, from the seven analysts covering Schr￶dinger, is for revenues of US$233.9m in 2026. This implies a definite 8.3% reduction in Schr￶dinger's revenue over the past 12 months. Losses are forecast to balloon 51% to US$2.09 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$252.7m and losses of US$1.84 per share in 2026. So it's pretty clear the analysts have mixed opinions on Schr￶dinger after this update; revenues were downgraded and per-share losses expected to increase. See our latest analysis for Schr￶dinger There was no major change to the consensus price target of US$21.13, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Schr￶dinger analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$13.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business. Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 11% annualised decline to the end of 2026. That is a notable change from historical growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. It's pretty clear that Schr￶dinger's revenues are expected to perform substantially worse than the wider industry. The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Schr￶dinger. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that in mind, we wouldn't be too quick to come to a conclusion on Schr￶dinger. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Schr￶dinger analysts - going out to 2028, and you can see them free on our platform here. You should always think about risks though. Case in point, we've spotted 1 warning sign for Schr￶dinger you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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 NEW YORK, May 05, 2026--(BUSINESS WIRE)--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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260505334998/en/ Contacts Jaren Madden (Investors and Media) Schrödinger, Inc. [email protected] 617-286-6264 Matthew Luchini (Investors) Schrödinger, Inc. [email protected] 917-719-0636

Schrödinger is accelerating its shift to hosted software licensing, reporting Q1 ACV of $28.4 million (up 12%) and trailing four‑quarter ACV of $201 million, with hosted revenue now at 34% of software revenue and a target of reaching 75% hosted within three years. Q1 total revenue was $58.6 million with drug discovery revenue rising to $22.9 million (from $10.2M a year earlier), while software gross margin compressed to 69% due to the hosted transition; management reiterated 2026 guidance of ACV $218–228 million and drug discovery revenue $55–65 million. Corporate catalysts include Eli Lilly’s planned $2.3 billion acquisition of Ajax (Schrödinger holds ~6% equity) that could produce cash and a non‑operating gain on closing, and the upcoming early access release of agentic AI “Bunsen,” which management says could expand throughput‑based licensing demand. Interested in Schrodinger, Inc.? Here are five stocks we like better. 3 Momentum Stocks That Could Soar Post-Market Volatility Schrodinger (NASDAQ:SDGR) reported first-quarter 2026 results and highlighted progress in its transition to hosted software licensing, growth in annual contract value (ACV), and recent business development activity tied to its drug discovery collaborations. CEO Ramy Farid said the company was “off to a strong start,” reporting first-quarter ACV of $28.4 million, up 12% from the year-ago period. CFO Richie Jain added that trailing four-quarter ACV reached $201 million and said growth was “primarily driven by our top 20 pharma customers” expanding platform access, onboarding new products, and integrating Schrodinger’s tools more deeply into R&D workflows. → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook AI Pharma: 2 Paths to AI-Powered Drug Investment Total revenue in the quarter was $58.6 million. Software revenue was $35.6 million, and Jain said hosted revenue contributed $12.1 million, or 34% of software revenue, compared with 24% in the first quarter of 2025. On a trailing four-quarter basis, hosted revenue represented 27% of software revenue. Management emphasized that recognized software revenue can be “highly variable” during the accelerated shift to hosted contracts because hosted revenue is recognized ratably over the contract term rather than upfront. On the hosted transition, Jain said the company is “aiming to transition from on-prem to hosted upon the contract date,” with new customers deployed on hosted “in the first instance.” He reiterated a longer-term target “getting to 75% by the 3-year period.” Farid and Jain also noted “limited cases” where multi-year on-premise deals were converted to hosted ahead of renewal dates, with Jain saying the impact was modest in Q1 but expected to become more visible from Q2 onward. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Simulations Plus Stock Drops 15% Despite EPS Beat Software gross margin was 69%, down from 80% in Q1 2025, which Jain attributed to the planned accelerated transition to hosted licensing. Starting this quarter, the company began reporting contribution revenue as a separate line item for additional visibility into software and drug discovery performance. Jain said historical results were reclassified because contribution had previously been included within software and drug discovery revenue. → 3 Emerging Markets ETFs to Maximize Exposure to High-Potential Countries Contribution revenue was $0.1 million in Q1 2026, down from $4.3 million in Q1 2025. Jain said the decline was driven by completion of initial funding from the Gates Foundation supporting Schrodinger’s predictive toxicology initiative. Farid said Schrodinger expects to benefit from an evolving regulatory environment and described predictive toxicology as aligned with FDA efforts to reduce animal testing and expand computational methods. In response to an analyst question on the initiative’s commercial traction, Farid said customer feedback “continues to be really very positive,” adding that prospective testing by customers is validating results the company observed during development and internal use. Drug discovery revenue was $22.9 million in the quarter, up from $10.2 million a year earlier. Jain attributed the increase to “accelerated recognition of deferred revenue associated with the continued progress” of collaboration programs and “the discontinuation of one collaboration program.” Farid separately cited “drug discovery revenue of $23 million” as a significant contributor to quarterly performance. Management also discussed Eli Lilly’s announced $2.3 billion planned acquisition of Ajax Therapeutics, a company Schrodinger co-founded. Farid said Schrodinger holds an approximately 6% equity stake in Ajax and called the deal “the latest example of a multi-billion dollar deal for a Schrödinger co-developed molecule.” President and Head of Therapeutics R&D Karen Akinsanya said Ajax’s AJ11095, described as “a first-in-class type 2 JAK inhibitor,” was “the primary driver of the announced deal.” She also pointed to prior transactions and liquidity events involving molecules Schrodinger co-discovered, including Lilly’s acquisitions of Morphic, Petra, and Ajax, the sale of Nimbus’ ACC and TYK2 inhibitors, and the IPOs of Relay and Structure. On financial reporting implications from the Ajax transaction, Jain said the sale was “not contemplated” in guidance. He said the primary impact would be to cash when the deal closes, noting Schrodinger ended the quarter with $406 million in cash and marketable securities and “anticipate receiving our portion of the upfront cash payment” upon closing. Jain added that any equity proceeds would be reflected on the balance sheet, while in response to another question he said he would expect the equity stake impact to run through the P&L as a non-operating gain. Akinsanya reviewed clinical updates on two wholly owned programs. She said Schrodinger presented initial clinical data in April at the AACR annual meeting for SGR-3515, a Wee1/Myt1 inhibitor, from an ongoing phase I dose escalation study focused on safety, tolerability, and pharmacokinetics. According to Akinsanya, SGR-3515 was “generally well-tolerated” on an intermittent schedule of three days on and 11 days off, and initial biomarker data supported the company’s dual-inhibition hypothesis. She reported “encouraging early anti-tumor activity,” citing a 65% disease control rate among evaluable patients treated at doses of 100 milligrams or higher. She also said the company remains encouraged by SGR-1505, a MALT1 inhibitor, where it continues to see a 100% response rate and durable responses in patients with Waldenström’s macroglobulinemia. Akinsanya noted SGR-1505 has both FDA Fast Track and Orphan Drug designations. As the phase I studies conclude, Akinsanya said Schrodinger is “actively exploring partnership opportunities” for mid- and late-stage development of both assets. Jain said clinical activities are expected to be “largely complete by the end of 2026,” with approximately $10 million to $15 million of R&D expected in full-year 2026 “as we wind down these activities and seek partners.” Farid said Schrodinger plans to release an early access version this summer of Bunsen, an “agentic AI co-scientist” designed to autonomously execute complex molecular discovery workflows. He said Schrodinger’s material science and therapeutics teams have already been using Bunsen internally, and that it has had an “extraordinary” impact on productivity for both expert and non-expert users. In Q&A, Farid linked Bunsen to the company’s throughput-based licensing approach, saying increased automation could expand demand and “the need for our customers to license that technology on a larger scale.” CTO and COO Patrick Lorton added that customers are already using more general agentic AI tools alongside Schrodinger’s technology, but said Schrodinger built Bunsen because its tools are “such an expert tool” and require a model trained specifically on how to use them efficiently. Lorton said the company is “building an agentic layer on top of LLMs” and is not tied to a single large language model provider; he said the company “regularly work[s] with, and talk[s] with Anthropic” as Bunsen is built. Asked about go-to-market and pricing, Farid said details are still being worked out during early access rollouts with close partners, including validation efforts to maximize reliability. He said the company expects the technology to become “ubiquitous” and broadly available to customers over time, but said pricing decisions will depend on feedback during the early access period. Operating expenses in Q1 were $78 million, down 4% from $82 million a year earlier. Jain attributed the decrease to efficiency measures and disciplined expense management across R&D and G&A, while continuing to invest in sales and marketing. Other expenses totaled $11 million, which Jain said was primarily due to changes in fair value of equity investments and net interest income/expense items. Net loss was $60 million, unchanged from Q1 2025. Schrodinger maintained its full-year 2026 guidance. Jain reiterated expectations for: ACV of $218 million to $228 million (10% to 15% growth) Drug discovery revenue of $55 million to $65 million, with quarterly variability due to milestone and collaboration timing For Q2 2026, the company guided to $19 million to $23 million in ACV, explicitly excluding contribution ACV, and noted that Q2 2025 ACV of $23.3 million included $5 million of contribution ACV related to the Gates Foundation grant. Jain said the full-year ACV range could include some contribution ACV, but the company did not quantify that component. Schrödinger, Inc is a life sciences and materials discovery company that specializes in the application of physics-based computational platforms to accelerate drug discovery and advanced materials design. Founded in 1990 by Professor Richard A. Friesner, Schrödinger has developed a suite of proprietary software tools—such as Maestro for molecular modeling, Glide for molecular docking and Jaguar for quantum chemistry calculations—that enable scientists to predict molecular behavior with high accuracy. The article "Schrodinger Q1 Earnings Call Highlights" was originally published by MarketBeat.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Schrödinger (SDGR) is back in focus after first quarter earnings. Revenue held near prior year levels, and sales, net loss and per share figures gave investors fresh data on the company’s current spending profile. See our latest analysis for Schrödinger. The stock has seen an 11.14% 1 month share price return and a 5.15% 7 day share price return. However, the year to date share price return shows a 28.42% decline and the 1 year total shareholder return reflects a 45.37% loss, indicating that momentum has been fading over a longer horizon. If Schrödinger’s recent moves have you reassessing the space, this can be a good moment to scan for other opportunities in AI focused healthcare, starting with 35 healthcare AI stocks With analysts seeing room between the current US$12.87 share price and their targets, and the business still reporting losses, the real question is whether Schrödinger is undervalued today or if the market is already pricing in future growth. With Schrödinger’s most followed narrative pointing to a fair value of $21.38 against a last close of $12.87, the gap in expectations is clear and centers on how future growth and margins could reshape the earnings profile. Read the complete narrative. Curious what kind of revenue climb and margin shift are baked into that view? The narrative leans on a specific growth pace, a profit swing, and a punchy future earnings multiple. The exact mix behind that $21.38 figure might surprise you. Result: Fair Value of $21.38 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this hinges on software margins and biotech demand. Pressure from hosted revenue mix shifts or weaker client budgets could quickly challenge that 40% undervalued narrative. Find out about the key risks to this Schrödinger narrative. The 40% undervalued fair value hinges on future earnings, but the current P/S ratio tells a tougher story. At about 3.7x sales versus a fair ratio of 1.9x and a peer average of 1.5x, the stock screens as expensive today. Which signal do you put more weight on? See what the numbers say about this price — find out in our valuation breakdown. Mixed messages on value and risk so far? Act while the data is fresh and weigh it against the company's 2 key rewards and 1 important warning sign If Schrödinger has sharpened your focus, do not stop here. Use fresh data while it is top of mind and line up your next watchlist candidates. Spot potential value opportunities early by reviewing the 51 high quality undervalued stocks before others start paying attention. Prioritize resilience by scanning the 72 resilient stocks with low risk scores to see which companies score well on stability and lower risk profiles. Hunt for quality beyond the usual tickers by checking the screener containing 25 high quality undiscovered gems that may not yet be widely followed. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SDGR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by broad-based growth in ACV, reflecting usage scale-ups among top 20 pharma customers and the onboarding of new products. The $2.3 billion acquisition of Ajax Therapeutics by Eli Lilly serves as a major validation of the company's physics-based computational platform and its ability to co-develop high-value molecules. Management is executing a deliberate shift from on-premise to hosted licensing to align revenue with operational growth and create a more predictable financial profile. The platform's competitive advantage is defined by its ability to generate 'ground truth' simulations that overcome the data scarcity limitations of standard AI models. A new agentic AI co-scientist, Bunsen, is being introduced to automate complex discovery workflows and lower the barrier for non-expert users to deploy sophisticated technology. The biopharmaceutical funding environment is showing signs of improvement, leading to increased demand for 'predict-first' computational paradigms that reduce R&D time and costs. Full-year ACV guidance of $218 million to $228 million is maintained, assuming 10% to 15% growth despite the near-term revenue headwinds from the hosted transition. The company expects to reach a 75% hosted software mix within a three-year period, which will transition revenue recognition from upfront to ratable. Schr￶dinger is actively exploring partnership opportunities for the mid- and late-stage development of its wholly-owned programs SGR-1505 and SGR-3515 as it completes current Phase I studies, consistent with a strategy of partnering programs rather than advancing them further into the clinic internally. Operating expenses are projected to be lower than 2025 levels due to disciplined expense management and the winding down of internal clinical trial costs. The summer release of the Bunsen early access version is expected to drive higher utilization of throughput-based licensing by accelerating the design-predict-make-test-analyze cycle. The company introduced 'contribution revenue' as a separate line item to improve visibility into core software and drug discovery performance. Software gross margin declined to 69% from 80% year-over-year, a direct result of the planned transition to ratable revenue recognition for hosted licenses. The Ajax acquisition proceeds are not included in current guidance; the company expects to receive approximately 6% of the undisclosed upfront cash payment upon closing. Drug discovery revenue saw a significant increase to $22.9 million due to accelerated recognition of deferred revenue from collaboration progress and one program discontinuation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Bunsen acts as a 'co-scientist' that eliminates barriers to large-scale deployment for both expert and non-expert users. Because Schrodinger uses a throughput-based rather than seat-based licensing model, increased efficiency from AI directly drives higher license demand. While most conversions happen at renewal, management successfully transitioned several large multi-year on-premise contracts to hosted ahead of schedule in Q1. All new customers are now being deployed as hosted in the first instance to accelerate the 75% adoption target. Management emphasized that the drug discovery business is highly synergistic with software, providing the 'real-world' validation necessary to refine the platform. The company will no longer take programs into the clinic internally, instead seeking early-stage partnerships like the recent Novartis deal to create value without clinical risk.