Schrodinger Inc (SDGR)

The Quiet Bottleneck in AI Drug Discovery Isn't the Model -- It's the Biology Underneath ItJune 16, 2026 8:45 AM
PR Newswire (US) Issued on behalf of MindWalk Holdings Corp.Everyone is racing to point powerful AI models at drug discovery. A growing camp argues the real prize is the layer beneath the models — the connected biological knowledge they reason over — and that is where one Nasdaq-listed company has placed its bet.NEW YORK, June 16, 2026 /PRNewswire/ -- Equity Insider News Commentary — The story the market has been telling itself about artificial intelligence and drug discovery is, at its core, a story about models. Bigger models, smarter models, models that can predict how a protein folds or design an antibody from scratch. But a quieter and increasingly influential argument is taking hold among the people actually building these systems: in biology, the model may be the least durable part of the equation. Models improve, get copied, and get commoditized. What is hard — and potentially far more valuable — is the connected, trustworthy biological knowledge the model has to reason over in the first place. Feed even a brilliant model fragmented, contradictory data and it will, in the words of one industry executive, confidently get it wrong. That debate moves to center stage on June 15, 2026, when MindWalk Holdings Corp. (NASDAQ: HYFT) joins a virtual investor panel hosted by research firm Jones — alongside generative-biology company Absci (NASDAQ: ABSI) and a leading AI compute provider — titled "Partnering to Power the New Era of Drug Discovery." The panel is a small event, but it sits on top of one of the most consequential questions in biotech: as the industry pours capital into AI, what is the part that actually compounds in value? MindWalk's answer — and the trajectory of the broader field — is worth understanding now, because it reframes where the durable advantages in AI-driven medicine may ultimately lie.Why AI Drug Discovery Hit a Wall — and What ChangedThe promise of applying AI to drug discovery has always been intoxicating: compress the decade-plus, billion-dollar odyssey of finding and validating a new medicine into something faster, cheaper, and more likely to succeed. The early wave of "AI-first" biotechs raised enormous sums on that promise. But the field ran into a hard truth that has little to do with algorithms. Biological data is a mess. It is scattered across incompatible files, formats, instruments, lab notebooks, and decades of literature; it is riddled with gaps and contradictions; and the relationships that matter most — how a sequence maps to a structure, a function, a mechanism, a disease — are often implicit rather than recorded. A model trained or prompted on that fragmented foundation can produce fluent, confident answers that are simply wrong, a failure mode the field has come to call hallucination.In consumer applications, a hallucinating chatbot is an annoyance. In drug discovery, it is a multimillion-dollar wrong turn, sending scientists down a path toward a target or molecule that was never viable. As the industry now races to deploy not just static AI models but autonomous "agentic" systems — AI that can plan and execute multi-step research workflows with limited human supervision — the cost of bad underlying data multiplies. An agent acting on fragmented biology does not just give one wrong answer; it compounds the error across an entire chain of decisions. That escalating risk is exactly why attention is shifting from the models themselves to the integrity of the biological foundation they operate on.MindWalk's Bet: Own the Context Layer, Not the ModelMindWalk — a company that rebranded in 2025 from its prior identity as ImmunoPrecise Antibodies, unifying its operations and adopting the Nasdaq ticker HYFT — has built its entire strategy around that shift. Rather than competing to build the flashiest model, the company positions its durable asset as the layer underneath: a biological "context layer" that connects and enriches data before any model reasons over it. Its proprietary HYFT® Technology, refined over roughly two decades of curation, is described as a continuously evolving biological representation spanning 660 million biological patterns and 25 billion relationships — a kind of connective tissue that links sequences, structures, functions, mechanisms, pathways, evidence, and literature into a single queryable foundation.On top of that foundation sit two products the company has brought to market. ReefIQ™, launched in June 2026, is pitched as the biological context layer that sits between a client's fragmented discovery data and its AI reasoning workflows — reconnecting the pieces before the AI acts. LensAI™ is the reasoning and application layer used for target discovery, candidate diligence, and portfolio decision support, and increasingly to host the agentic workflows pharma is racing to adopt. The company's central thesis, which CEO Dr. Jennifer Bath is expected to articulate on the Jones panel, is that because its predictions are grounded in what evolution has already conserved — the functional patterns that have survived across biology — rather than in raw statistical correlation, the system is designed to keep both models and agents from hallucinating in the highest-consequence workflows. Bath has framed the convergence she sees as "biology, context, and compute."Importantly, this is not purely conceptual. MindWalk reported that its largest enterprise AI client signed a one-year LensAI platform contract — the first contracted, recurring platform-revenue agreement in the company's history — and that the structure is one it intends to scale across its client base. For its fiscal third quarter ended January 31, 2026, the company reported revenue of $4.2 million (in Canadian dollars), up 52% year-over-year and a third consecutive quarter of year-over-year growth, with U.S. revenue doubling. The company also reported preclinical dengue data that, by its account, supported a computational prediction its platform generated before any animal was immunized — an early, real-world validation of the approach.The Field Around MindWalkMindWalk is one expression of a sector that has matured well beyond the first hype cycle, and looking at how a few public peers are positioned helps frame both the opportunity and where MindWalk's niche sits within it. Each of these companies attacks the AI-drug-discovery problem from a different layer of the stack.Absci Corporation (NASDAQ: ABSI) — MindWalk's fellow panelist — represents the generative-design frontier. The company uses generative AI models paired with an integrated wet lab to design therapeutic antibodies essentially from scratch, conditioning its models on a target's structure and then validating proposals through high-throughput experiments. Absci became clinical-stage with an AI-designed antibody entering a Phase 1 trial, making it a closely watched proof point for whether generative design can produce real drugs. It illustrates the "design" layer of the field — complementary to the data-foundation layer MindWalk emphasizes.Recursion Pharmaceuticals, Inc. (NASDAQ: RXRX) is among the largest and best-known "AI-first" drug discovery platforms, having industrialized the generation of biological data through massive automated experimentation and paired it with machine learning to identify drug candidates. With collaborations involving major pharmaceutical companies and its own clinical-stage pipeline, Recursion represents the scaled, full-stack ambition of the sector — building both the data engine and the drug pipeline — and the patient capital that strategy requires.Schrödinger, Inc. (NASDAQ: SDGR) approaches the problem from a different intellectual tradition: physics-based computational chemistry. Its software platform simulates how molecules behave at a fundamental level to predict which candidates are worth pursuing, and it both licenses that software to the industry and advances its own pipeline. Schrödinger illustrates the established, software-led end of the field — a reminder that "computational drug discovery" predates the current AI wave and that different modeling philosophies coexist and compete.Certara, Inc. (NASDAQ: CERT) rounds out the group as the infrastructure-and-decision-support comparison closest in spirit to MindWalk's positioning. A leader in biosimulation and model-informed drug development, Certara provides software and AI-powered services used across the drug-development lifecycle, including in regulatory submissions. As one of the more established, revenue-generating names in the space, it demonstrates that there is a durable, infrastructure-layer business in AI-enabled drug development — the same category MindWalk is targeting with its context layer, albeit at a far larger and more mature scale. These companies are referenced to illustrate the sector and do not imply any partnership, endorsement, affiliation, or comparable financial performance; they differ widely in approach, size, and stage, and MindWalk is among the smaller, earlier-stage names. References to Absci, Jones, and the other panelists describe the event only and do not imply any endorsement or commercial relationship.The Investment Case — and the RisksThe bull case for the context-layer thesis is conceptually elegant. If models are destined to commoditize — and the pace at which capable AI models now proliferate suggests they might — then the enduring value in AI drug discovery accrues to whoever owns the trusted, connected biological foundation that every model and agent must rely on. A context layer, in that telling, becomes infrastructure: something pharma rents rather than rebuilds, with recurring revenue and compounding value as more data and more programs run through it. MindWalk's first recurring platform contract and its growing revenue are early evidence that customers may be willing to pay for exactly that.The risks, however, are substantial and should not be minimized. MindWalk is a small-cap company still posting operating losses as it transitions from a legacy wet-lab services business toward a scalable platform model. Its revenue, while growing, is modest in absolute terms, and the company depends on converting engagement into contracted, recurring arrangements that have only just begun. It relies on third-party compute and cloud providers, faces intense competition from larger and better-funded players, and operates in a field where adoption of bio-native and agentic AI could prove slower than hoped. As with any clinical- or platform-stage life-sciences company, there is no certainty that the capabilities described will translate into commercial success, and forward-looking claims about the technology remain just that — forward-looking.A Sector Finding Its Real FoundationWhat makes this moment interesting is not any single company or any single panel. It is that the AI-drug-discovery field appears to be maturing past its first, model-obsessed phase into a more sophisticated understanding of where value actually lives. The lesson emerging from the first wave — that pointing powerful AI at messy biology produces confident nonsense — has pushed serious players toward the unglamorous but essential work of connecting and grounding biological knowledge. Whether the durable advantage ultimately sits in generative design, industrialized data generation, physics-based simulation, or a connected context layer is precisely the question a panel like the one on June 15 exists to debate.MindWalk has placed a clear, focused bet on the context layer — that in the age of agentic AI, the biology has to be connected and trustworthy before a model ever acts on it, and that owning that foundation is the durable prize. It is an early-stage bet, with real execution and financing risk, and the market has yet to render its verdict. But the trajectory of the field is unmistakable: the conversation has moved from "whose model is biggest" toward "whose biology is most trustworthy," and the companies building that foundation are positioning themselves at what may prove to be the most defensible layer of the entire AI-medicine stack. For investors trying to understand where the next decade of drug discovery is headed, that shift is the story worth watching.SEE WHAT THE MARKET IS TALKING ABOUT BEFORE IT MOVESEagle Eye reads social, forum, and news chatter across thousands of investor conversations in real time — and surfaces the tickers the crowd is piling into, along with the sentiment and catalysts behind them.Explore Eagle Eye free (for now) at https://Eagle-Eye.devCONTACT:Equity Insiderinfo @therooster-2873SOURCES:[1] MindWalk Holdings Corp. — "MindWalk (NASDAQ: HYFT) CEO Dr. Jennifer Bath to Join Absci (NASDAQ: ABSI) and a Leading AI Compute Provider on Jones AI Day Panel…" (Business Wire, June 12, 2026; primary source for the panel, HYFT/ReefIQ/LensAI platform, Bath quote, 660M patterns / 25B relationships):
https://finance.yahoo.com/sectors/healthcare/articles/mindwalk-nasdaq-hyft-ceo-dr-130000157.html[2] MindWalk Holdings Corp. — "Launches ReefIQ™, a Biological Context Layer for AI Drug Discovery" (Business Wire, June 10, 2026; ReefIQ context-layer detail):
https://www.businesswire.com/news/home/20260610294167/en/MindWalk-Holdings-Corp.-NASDAQ-HYFT-Launches-ReefIQ-a-Biological-Context-Layer-for-AI-Drug-Discovery[3] MindWalk Holdings Corp. — "Reports Q3 Fiscal 2026 Financial Results" (Business Wire, March 12, 2026; $4.2M revenue +52% YoY, first recurring LensAI contract, subsidiaries):
https://www.businesswire.com/news/home/20260312858299/en/MindWalk-Holdings-Corp.-Reports-Q3-Fiscal-2026-Financial-Results[4] MindWalk Holdings Corp. — "ImmunoPrecise Rebrands as MindWalk, Announces NASDAQ Ticker Change to 'HYFT'" (Business Wire, Sept 3, 2025; rebrand, platform business-model shift):
https://www.businesswire.com/news/home/20250903938726/en/ImmunoPrecise-Rebrands-as-MindWalk-Announces-NASDAQ-Ticker-Change-to-HYFT[5] BioPharmaTrend — "Publicly Traded AI-driven Drug Discovery Companies" and related sector coverage (peer context: Absci, Recursion, Schrödinger, Certara):
https://www.biopharmatrend.com/artificial-intelligence/recent-ipos-among-ai-driven-platforms-for-drug-discovery-and-biotech-601/DISCLAIMER:Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a digital media distribution and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances.Equity Insider is a wholly-owned subsidiary of Market IQ Media Group, Inc. ("MIQ"). This article is being distributed by Equity Insider on behalf of MIQ. MIQ has been paid a fee for MindWalk Holdings Corp. advertising and digital media from Creative Direct Marketing Group ("CDMG"). This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this article or email as the basis for any investment decision. MIQ does not own shares of MindWalk Holdings Corp. but reserves the right to buy and sell shares of MindWalk Holdings Corp. at any time without any further notice. There may be 3rd parties who may have shares of MindWalk Holdings Corp., and may liquidate their shares which could have a negative effect on the price of the stock. We also expect further compensation as an ongoing digital media effort to increase visibility for the company; no further notice will be given, but let this disclaimer serve as notice that all material disseminated by MIQ has been reviewed and approved on behalf of MindWalk Holdings Corp. by CDMG; this is a digital media distribution.While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our publication is not trustworthy unless verified by their own independent research. Comparisons to other companies referenced in this publication are for contextual and illustrative purposes only and do not imply any partnership, endorsement, affiliation, or comparable financial performance. References to the Jones AI Day panel, Absci, and other panelists describe the event only and do not imply any endorsement, sponsorship, partnership, or commercial relationship. Forward-looking statements regarding technology, platform adoption, recurring revenue, clinical and preclinical outcomes, and market trends are subject to risks and uncertainties, and actual results may differ materially. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. View original content to download multimedia:https://www.prnewswire.com/news-releases/the-quiet-bottleneck-in-ai-drug-discovery-isnt-the-model--its-the-biology-underneath-it-302800965.html Original: The Quiet Bottleneck in AI Drug Discovery Isn't the Model -- It's the Biology Underneath It

Schrödinger Reports Inducement Grants under Nasdaq Listing Rule 5635(c)(4)May 22, 2026 8:30 AM
Business Wire Schrödinger, Inc. (Nasdaq: SDGR) today reported that on May 18, 2026, the company granted (i) a non-statutory stock option to purchase 1,875 shares of the company’s common stock to one newly hired employee and (ii) restricted stock units (RSUs) with respect to 18,766 shares of the company’s common stock to seven newly hired employees. These grants were made pursuant to the company’s 2021 Inducement Equity Incentive Plan, were approved by the compensation committee of the board of directors pursuant to a delegation by the company’s board of directors, and were made as a material inducement to such employees’ acceptance of employment with the company in accordance with Nasdaq Listing Rule 5635(c)(4) as a component of his or her employment compensation. The stock option has an exercise price of $12.05 per share, equal to the closing price of the company’s common stock on May 18, 2026. The stock option has a ten-year term and vests over four years, with 25 percent of the shares underlying the option vesting when such employee completes 12 months of continuous service measured from the employment start date and the balance of the shares vesting in a series of successive equal monthly installments of 1/48 of the original number of shares upon the employee’s completion of each additional month of service over the 36-month period following the first anniversary of the employment start date. The RSUs vest over four years, with 25 percent of such RSUs vesting when such employee completes 12 months of continuous service measured from the vesting commencement date, and the balance of the RSUs vesting in a series of successive equal yearly installments of 1/4 of the original number of RSUs upon each such employee’s completion of each additional year of service over the three-year period following the first anniversary of the vesting commencement date. The inducement grants are subject to the terms and conditions of award agreements covering the grants and the company’s 2021 Inducement Equity Incentive Plan. 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. Founded in 1990, Schrödinger has approximately 800 employees operating from 15 locations globally. To learn more, visit www.schrodinger.com, follow us on LinkedIn, or visit our blog, Extrapolations.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20260522362970/en/ Matthew Luchini (Investors)
Schrödinger, Inc.

Schrödinger Reports Inducement Grants under Nasdaq Listing Rule 5635(c)(4)April 17, 2026 8:30 AM
Business Wire
Schrödinger, Inc. (Nasdaq: SDGR) today reported that on April 16, 2026, the company granted restricted stock units (RSUs) with respect to 4,253 shares of the company’s common stock to four newly hired employees. These grants were made pursuant to the company’s 2021 Inducement Equity Incentive Plan, were approved by the compensation committee of the board of directors pursuant to a delegation by the company’s board of directors, and were made as a material inducement to such employees’ acceptance of employment with the company in accordance with Nasdaq Listing Rule 5635(c)(4) as a component of his or her employment compensation.


The RSUs vest over four years, with 25 percent of such RSUs vesting when such employee completes 12 months of continuous service measured from the vesting commencement date, and the balance of the RSUs vesting in a series of successive equal yearly installments of 1/4 of the original number of RSUs upon each such employee’s completion of each additional year of service over the three-year period following the first anniversary of the vesting commencement date.


The inducement grants are subject to the terms and conditions of award agreements covering the grants and the company’s 2021 Inducement Equity Incentive Plan.


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. Founded in 1990, Schrödinger has approximately 800 employees operating from 15 locations globally. To learn more, visit www.schrodinger.com, follow us on LinkedIn, or visit our blog, Extrapolations.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260417188252/en/
Matthew Luchini

Schrödinger, Inc.

matthew.luchini@schrodinger.com

917-719-0636


Original: Schrödinger Reports Inducement Grants under Nasdaq Listing Rule 5635(c)(4)

Schrödinger Reports Fourth Quarter and Full-Year 2025 Financial ResultsFebruary 25, 2026 4:05 PM
Business Wire
2025 Total Revenue of $256 Million


2025 Software Revenue of $200 Million; 2025 Software ACV of $198 Million


Strong Balance Sheet Supports Path to Positive Adjusted EBITDA by Year-End 2028


Accelerating Transition to Ratable, Hosted Software Revenue


Schrödinger, Inc. (Nasdaq: SDGR) today announced financial results for the fourth quarter and full-year ended December 31, 2025, and provided its 2026 outlook and 2028 financial objectives.


"Schrödinger’s performance in 2025, marked by 23% total revenue growth and 11% software revenue growth, is a testament to the resilience of our business and the unique value we provide," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. “While the drug discovery AI landscape is expanding rapidly, we differentiate ourselves by consistently delivering outsized real-world impact, validated by continued robust customer engagement, high customer retention, and a strong track record of highly differentiated development candidates across our collaborative and internal therapeutics portfolio. Our success is enabled by our transformative platform that integrates ground-truth, physics-based simulation with leading-edge AI and machine learning. Looking ahead to 2026, we are poised to scale our impact through new platform enhancements and the commercial launch of our predictive toxicology solution.”


Full Year 2025 Financial Highlights (comparisons are to full year 2024, unless otherwise noted)



Total revenue was $255.9 million, a 23.3% increase.



Software revenue was $199.5 million, a 10.6% increase.



Drug discovery revenue was $56.4 million compared to $27.2 million.



Software gross margin was 74%.



Operating expenses were $309.5 million, a 9.3% decrease.



Other income, which includes gains/losses on equity investments, changes in fair value of such investments and interest income/expense, was $64.6 million.



Net loss for the full year was $103.3 million, compared to $187.1 million.



At December 31, 2025, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $402.3 million, compared to approximately $367.5 million at December 31, 2024.



Fourth Quarter 2025 Financial Highlights (comparisons are to fourth quarter 2024, unless otherwise noted)



Total revenue was $87.2 million, a 1.2% decrease.



Software revenue was $69.3 million, a 13% decrease, primarily due to the accelerated recognition of upfront revenue from multi-year agreements signed in 2024, partially offset by higher hosted revenue.



Drug discovery revenue was $18.0 million compared to $8.7 million.



Software gross margin was 81%.



Operating expenses were $74.5 million, a 12.2% decrease.



Other income, which includes gains/losses on equity investments, changes in fair value of such investments and interest income/expense, was $50.1 million.



Net income for the fourth quarter was $32.5 million, compared to a net loss of $40.2 million in the fourth quarter of 2024.



For the three months and year ended December 31, 2025, Schrödinger reported adjusted EBITDA of $(5.2) million and $(114.9) million, respectively, compared to adjusted EBITDA of $(6.6) million and $(152.5) million for the three months and year ended December 31, 2024, respectively.


See “Non-GAAP Information” below and the table at the end of this press release for a reconciliation of adjusted EBITDA to GAAP net income (loss).


Full Year 2025 Key Performance Indicators (KPIs)

Schrödinger today reported 2025 key performance indicators for both the software and drug discovery components of its business.




Software KPI






2025






2024






% Growth








Total annual contract value (ACV)






$198.5M






$190.8M






4.0%








Top 20 Pharma ACV






$80.8M






$70.0M






15.3%








Commercial ACV






$177.4M






$165.8M






7.0%








ACV per Commercial Customer (>$1M ACV)






$3.9M






$3.3M






16.3%








Number of Commercial Customers (>$1M ACV)






27






29






—








Net Dollar Retention (Commercial Customers)






100%






113%






—








Gross Dollar Retention (Commercial Customers)






96%






96%






—









Drug Discovery KPI






2025






2024








Ongoing programs eligible for royalties






16






13








Number of collaborators since 2018






20






19







For additional information about the company’s KPIs, see “Operating Metrics” below.


Today Schrödinger announced that it is accelerating its transition to hosted software and license server solutions from traditional on-premise deployments. While this transition was already underway, the company believes that accelerating it will result in more predictable revenue and normalize the impact of contract renewal timing and duration. This industry-standard shift provides customers with faster onboarding, enhanced renewals, and improved support. This transition shifts upfront revenue recognition associated with on-premise licenses to ratable revenue recognition for hosted contracts. While this shift is expected to introduce short-to-medium term declines in software revenue, there will be no change to ACV or cash flow from this transition. Schrödinger believes this model better aligns with the evolving infrastructure needs of its customers and regulatory trends. Schrödinger expects that the majority of its software contracts will be transitioned to hosted agreements by 2028. Hosted revenue was 23% of software revenue for the year ended December 31, 2025 compared to 20% for the year ended December 31, 2024.


2026 Financial Outlook

As of February 25, 2026, Schrödinger provided the following expectations for the fiscal year ending December 31, 2026:



Software 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 first quarter of 2026, software ACV is expected to range from $24 million to $28 million, representing $197 million to $201 million on a trailing four quarter basis.


2028 Financial Objectives

In addition to its 2026 financial outlook, Schrödinger is establishing the following financial objectives reflecting its goal of achieving positive adjusted EBITDA by the end of 2028:



Software ACV Growth: Deliver durable software ACV growth of 10% - 15% annually.



Hosted Software Transition: Substantially complete transition to hosted software as revenue converges with ACV.



Gross Margin: Return software gross margin percentage to high 70s.



Drug Discovery Revenue: Target drug discovery revenue of $50 million annually, with potential variability each year due to milestone-driven timing of collaboration revenue.



Operating Expense Discipline and Cash Flow Generation: Achieve positive adjusted EBITDA by the end of 2028.



“Our 2026 outlook and 2028 financial objectives reflect a strategic evolution in our business model,” said Richie Jain, chief financial officer of Schrödinger. “We are accelerating our transition to a hosted licensing model. This shift from upfront to ratable recognition is expected to establish a more predictable, higher-visibility revenue stream that better aligns with standard software business practices without impacting cash flow. During this transition, we believe ACV provides useful insight into the underlying trends and performance of our software business given the transition’s impact on the timing of recognition of GAAP revenue, which we expect to decrease in the short-to-medium term. Accordingly, we have introduced a new set of key performance indicators to provide supplemental insight into our business performance. With our opportunities for continued growth and disciplined expense management, we aim to achieve positive adjusted EBITDA by the end of 2028.”


Recent Highlights

Platform

Schrödinger’s platform addresses the challenge of data scarcity in molecular discovery by combining ground-truth, physics-based simulation with AI to enable teams to efficiently design high-quality, novel drug candidates and materials. Recent platform highlights include the following:



In January, Schrödinger introduced RetroSynth, an AI-driven solution that enables chemists to rapidly identify the most efficient routes for the synthesis of novel molecules. RetroSynth reduces the time spent on manual route design and helps scientists prioritize the synthesis of molecules that not only have the most desirable attributes but are also synthetically tractable, while reducing costly lab failures.




In January, the company announced a collaboration with Lilly TuneLab, whereby LiveDesign, Schrödinger’s widely used informatics platform, will be a priority interface for participating biotech companies to access TuneLab workflows. This allows users to combine Lilly’s federated learning models with Schrödinger’s physics-based simulations, addressing the data scarcity problem that often hinders AI-driven discovery.




Also in January, Schrödinger announced a strategic agreement with Manas AI. Under the terms of the agreement, Manas AI will gain significant access to the company’s computational platform and is able to integrate Schrödinger’s physics-based modeling solutions with Manas AI’s algorithms to improve predictive accuracy and speed.



Therapeutics Portfolio

Schrödinger is advancing a portfolio of proprietary and collaborative programs that demonstrate the impact of its predict-first approach to drug design. The portfolio includes over twenty-five first-in-class, best-in-class, and first-in-modality programs across all stages of development, including more than ten clinical-stage programs. Sixteen programs are eligible for royalties on sales. The company has generated over $650 million in cash from its drug discovery initiatives since 2020 and is eligible for up to nearly $5 billion in potential future milestones. Recent highlights include the following:



Schrödinger is working to complete the Phase 1 clinical packages for SGR-1505, Schrödinger’s investigational MALT-1 inhibitor for the treatment of relapsed or refractory B-cell malignancies, and of SGR-3515, its investigational Wee1/Myt1 inhibitor for the treatment of solid tumors. The company expects to present initial SGR-3515 data in the second quarter of 2026 and is exploring strategic partnerships to advance the development of these programs.




In December, Structure Therapeutics, a company co-founded by Schrödinger and in which it has an equity stake, announced positive topline Phase 2B data of aleniglipron, its once-daily oral small molecule GLP-1 receptor agonist, in development for the treatment of obesity. Structure expects to initiate the aleniglipron Phase 3 program in mid-2026. Also in December, Structure announced the initiation of a first-in-human Phase 1 clinical study of ACCG-2671, an oral small molecule amylin receptor agonist for the treatment of obesity.




In December, Ajax Therapeutics, a company co-founded by Schrödinger, presented preclinical data of AJ1-11095, the company’s first-in-class type II JAK2 inhibitor that is currently in a Phase 1 trial in patients with relapse/refractory myelofibrosis at the American Society of Hematology (ASH) Annual Meeting. Later in December, AJ1-11095 received orphan drug designation from the U.S. Food and Drug Administration for the treatment of myelofibrosis.




In December, Takeda announced positive topline Phase 3 results of zasocitinib, its investigational TYK2 inhibitor, in moderate-to-severe plaque psoriasis. Takeda intends to file a New Drug Application with the FDA in 2026. Takeda acquired zasocitinib from Nimbus, a company co-founded by Schrödinger, in 2023. Schrödinger is eligible to receive future cash distributions from potential milestone payments made to Nimbus upon achievement of specified sales milestones.



Webcast and Conference Call Information

Schrödinger will host a conference call to discuss its fourth quarter and full year 2025 financial results on Wednesday, February 25, 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/events-and-presentations.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, ACV by certain industries and customer cohorts, net dollar retention rate, and gross dollar retention rate.


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 Top 20 Pharma and Commercial customers. The Top 20 Pharma cohort consists of the top 20 pharmaceutical companies, as measured by their 2024 revenue. The Commercial customer cohort includes all of its customers purchasing its computational software solutions for commercial use, excluding government and academic institutions and customers from which it derives contribution revenue. 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.


Net Dollar Retention Rate (Commercial customers). Schrödinger calculates Net Dollar Retention Rate for Commercial customers by comparing the ACV from the same cohort of Commercial customers across two periods. This metric excludes ACV attributable to new Commercial customers added during the period. The company calculates this by starting with the prior year’s ACV for its Commercial customers. The company then adds the amount of increase in renewals from these customers, which it refers to as upsells, and subtracts the amount of decreases in renewals either as a result of decreased usage of its software or lost business, which it refers to as churn. The company then divides this aggregate number by the prior year ACV for its Commercial customers to arrive at the net dollar retention rate for its Commercial customers.


Gross Dollar Retention Rate (Commercial customers). Schrödinger calculates Gross Dollar Retention Rate for Commercial customers by comparing the ACV from the same cohort of Commercial customers across two periods, excluding the effect of any increases or expansions of ACV from any customers within the cohort. This metric also excludes ACV attributable to new Commercial customers added during the period. The company calculates this by starting with the prior year’s ACV for its Commercial customers. The company then subtracts the amount of churn, and divides this resulting number by the prior year ACV for its Commercial customers to arrive at the gross dollar retention rate for its Commercial customers.


For both its net dollar retention rate and its gross dollar retention rate, Schrödinger excludes from the calculation Commercial customers that were acquired by other companies during the applicable period, as these events are outside of the company’s control, may not reflect the underlying demand for its software solutions, and enhance comparability between periods. Together, gross and net dollar retention rates provide insight into both customer retention and the company’s ability to drive incremental growth from current customers.


Ongoing programs eligible for royalties. Schrödinger tracks the aggregate number of collaborative and partnered programs for which the company is eligible to receive any amount of future royalties on sales, if any.


Numbers of collaborators since 2018. Schrödinger tracks the aggregate number of collaborators that the company has collaborated with, or partnered with, for drug discovery and drug development since 2018. The number of collaborators presented is a cumulative number and the company only includes those collaborations from which the company has derived revenue since January 1, 2018.


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 first quarter ending March 31, 2026, its financial objectives for the fiscal year ending December 31, 2028, including its goal of achieving positive Adjusted EBITDA, the company’s expectations relating to the accelerated transition to hosted software deployments, including the financial and operational benefits and impacts from such transition, 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, including the expectations related to the company’s commercial launch of its predictive toxicology software solution, 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, 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission on February 25, 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)








 



 






Year Ended December 31,








 






 






2025






 






 






 






2024






 






 






 






2023






 








Revenues:






 






 






 






 






 








Software products and services






$






199,500






 






 






$






180,365






 






 






$






159,124






 








Drug discovery






 






56,369






 






 






 






27,174






 






 






 






57,542






 








Total revenues






 






255,869






 






 






 






207,539






 






 






 






216,666






 








Cost of revenues:






 






 






 






 






 








Software products and services






 






51,001






 






 






 






36,900






 






 






 






29,514






 








Drug discovery






 






62,254






 






 






 






38,556






 






 






 






46,460






 








Total cost of revenues






 






113,255






 






 






 






75,456






 






 






 






75,974






 








Gross profit






 






142,614






 






 






 






132,083






 






 






 






140,692






 








Operating expenses:






 






 






 






 






 








Research and development






 






173,138






 






 






 






201,785






 






 






 






181,766






 








Sales and marketing






 






40,963






 






 






 






39,917






 






 






 






37,226






 








General and administrative






 






95,409






 






 






 






99,677






 






 






 






99,148






 








Total operating expenses






 






309,510






 






 






 






341,379






 






 






 






318,140






 








Loss from operations






 






(166,896






)






 






 






(209,296






)






 






 






(177,448






)








Other income:






 






 






 






 






 








Gain on equity investments






 






—






 






 






 






—






 






 






 






147,213






 








Change in fair value of equity investments






 






48,174






 






 






 






5,683






 






 






 






53,461






 








Other income






 






16,396






 






 






 






17,902






 






 






 






19,693






 








Total other income






 






64,570






 






 






 






23,585






 






 






 






220,367






 








(Loss) income before income taxes






 






(102,326






)






 






 






(185,711






)






 






 






42,919






 








Income tax expense






 






939






 






 






 






1,412






 






 






 






2,199






 








Net (loss) income






$






(103,265






)






 






$






(187,123






)






 






$






40,720






 








Net (loss) income per share attributable to common and limited common stockholders, basic:






$






(1.41






)






 






$






(2.57






)






 






$






0.57






 








Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, basic:






 






73,443,298






 






 






 






72,670,295






 






 






 






71,776,301






 








Net (loss) income per share of common and limited common stockholders, diluted:






$






(1.41






)






 






$






(2.57






)






 






$






0.54






 








Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, diluted:






 






73,443,298






 






 






 






72,670,295






 






 






 






74,986,816






 









Condensed Consolidated Balance Sheets (Unaudited)




(in thousands, except for share and per share amounts)










 



Assets






December 31,

2025






 






December 31,

2024








Current assets:






 






 






 








Cash and cash equivalents






$






230,517






 






 






$






147,326






 








Restricted cash






 






6,868






 






 






 






15,331






 








Marketable securities






 






164,947






 






 






 






204,798






 








Accounts receivable, net of allowance for doubtful accounts of $440 and $210






 






83,041






 






 






 






235,692






 








Unbilled and other receivables, net for allowance for unbilled receivables of $140 and $100






 






21,352






 






 






 






19,641






 








Prepaid expenses






 






12,540






 






 






 






12,205






 








Total current assets






 






519,265






 






 






 






634,993






 








Property and equipment, net






 






19,456






 






 






 






24,196






 








Equity investments






 






73,647






 






 






 






43,208






 








Goodwill






 






4,791






 






 






 






4,791






 








Right of use assets - operating leases






 






102,736






 






 






 






111,883






 








Other assets






 






6,265






 






 






 






4,155






 








Total assets






$






726,160






 






 






$






823,226






 








Liabilities and Stockholders’ Equity






 






 






 








Current liabilities:






 






 






 








Accounts payable






$






11,452






 






 






$






10,666






 








Accrued payroll, taxes, and benefits






 






39,264






 






 






 






42,110






 








Deferred revenue






 






112,853






 






 






 






111,944






 








Lease liabilities - operating leases






 






16,412






 






 






 






16,755






 








Other accrued liabilities






 






9,155






 






 






 






10,272






 








Total current liabilities






 






189,136






 






 






 






191,747






 








Deferred revenue, long-term






 






78,877






 






 






 






108,814






 








Lease liabilities - operating leases, long-term






 






92,816






 






 






 






101,074






 








Other liabilities, long-term






 






1,278






 






 






 






146






 








Total liabilities






 






362,107






 






 






 






401,781






 








Stockholders' equity:






 






 






 








Preferred stock, $0.01 par value. Authorized 10,000,000 shares; zero shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively






 






—






 






 






 






—






 








Common stock, $0.01 par value. Authorized 500,000,000 shares; 64,515,380 and 63,710,409 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively






 






645






 






 






 






637






 








Limited common stock, $0.01 par value. Authorized 100,000,000 shares; 9,164,193 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively






 






92






 






 






 






92






 








Additional paid-in capital






 






992,015






 






 






 






946,037






 








Accumulated deficit






 






(628,806






)






 






 






(525,541






)








Accumulated other comprehensive income






 






107






 






 






 






220






 








Total stockholders' equity






 






364,053






 






 






 






421,445






 








Total liabilities and stockholders' equity






$






726,160






 






 






$






823,226






 









Condensed Consolidated Statements of Cash Flows (Unaudited)




(in thousands)








 



 






Year Ended December 31,








 






 






2025






 






 






 






2024






 






 






 






2023






 








Cash flows from operating activities:






 






 






 






 






 








Net (loss) income






$






(103,265






)






 






$






(187,123






)






 






$






40,720






 








Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:






 






 






 






 






 








Gain on equity investments






 






—






 






 






 






—






 






 






 






(147,213






)








Changes in fair value of equity investments






 






(48,174






)






 






 






(5,683






)






 






 






(53,461






)








Depreciation and amortization






 






6,022






 






 






 






6,159






 






 






 






5,552






 








Stock-based compensation






 






42,997






 






 






 






49,903






 






 






 






47,841






 








Noncash investment accretion






 






(1,867






)






 






 






(7,592






)






 






 






(7,761






)








Loss on disposal of property and equipment






 






20






 






 






 






8






 






 






 






142






 








Decrease (increase) in assets:






 






 






 






 






 








Accounts receivable, net






 






152,651






 






 






 






(169,700






)






 






 






(10,039






)








Unbilled and other receivables






 






(1,711






)






 






 






3,483






 






 






 






(9,987






)








Reduction in the carrying amount of right of use assets - operating leases






 






9,147






 






 






 






8,942






 






 






 






7,766






 








Prepaid expenses and other assets






 






(2,445






)






 






 






(3,482






)






 






 






(8,462






)








Increase (decrease) in liabilities:






 






 






 






 






 








Accounts payable






 






908






 






 






 






(6,119






)






 






 






7,321






 








Accrued payroll, taxes, and benefits






 






(2,846






)






 






 






10,347






 






 






 






6,881






 








Deferred revenue






 






(29,028






)






 






 






155,484






 






 






 






(18,256






)








Lease liabilities - operating leases






 






(8,601






)






 






 






(10,053






)






 






 






(3,694






)








Other accrued liabilities






 






91






 






 






 






(1,942






)






 






 






5,917






 








Net cash provided by (used in) operating activities






 






13,899






 






 






 






(157,368






)






 






 






(136,733






)








Cash flows from investing activities:






 






 






 






 






 








Purchases of property and equipment






 






(1,442






)






 






 






(7,311






)






 






 






(13,403






)








Purchases of equity investments






 






—






 






 






 






(3,072






)






 






 






(4,125






)








Distribution from equity investment






 






—






 






 






 






—






 






 






 






147,213






 








Proceeds from sale and disposition of equity investments






 






17,735






 






 






 






48,798






 






 






 






—






 








Purchases of marketable securities






 






(312,959






)






 






 






(251,339






)






 






 






(320,624






)








Proceeds from maturity of marketable securities






 






354,564






 






 






 






361,760






 






 






 






383,973






 








Net cash provided by investing activities






 






57,898






 






 






 






148,836






 






 






 






193,034






 








Cash flows from financing activities:






 






 






 






 






 








Proceeds from issuances of common stock upon stock option exercises






 






2,989






 






 






 






1,490






 






 






 






9,440






 








Proceeds from issuance of common stock in ATM offering






 






—






 






 






 






8,868






 






 






 






—






 








Payment of offering costs






 






—






 






 






 






(177






)






 






 






(373






)








Principal payments on finance leases






 






(58






)






 






 






(58






)






 






 






(19






)








Net cash provided by financing activities






 






2,931






 






 






 






10,123






 






 






 






9,048






 








Net increase in cash and cash equivalents and restricted cash






 






74,728






 






 






 






1,591






 






 






 






65,349






 








Cash and cash equivalents and restricted cash, beginning of year






 






162,657






 






 






 






161,066






 






 






 






95,717






 








Cash and cash equivalents and restricted cash, end of year






$






237,385






 






 






$






162,657






 






 






$






161,066






 








 






 






 






 






 






 








Supplemental disclosure of non-cash investing and financing activities






 






 






 






 






 








Purchases of property and equipment in accounts payable






 






40






 






 






 






162






 






 






 






192






 








Purchases of property and equipment in accrued liabilities






 






81






 






 






 






157






 






 






 






457






 








Acquisition of right of use assets - operating leases, contingency resolution






 






—






 






 






 






2,848






 






 






 






514






 








Acquisition of right of use assets in exchange for lease liabilities - operating leases






 






—






 






 






 






—






 






 






 






15,085






 








Acquisition of right of use assets in exchange for lease liabilities - finance leases






 






—






 






 






 






—






 






 






 






279






 









Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (Unaudited)










 



 






Three Months Ended






 






Twelve Months Ended








December 31,






 






December 31,








 






 






2025






 






 






 






2024






 






 






 






2025






 






 






 






2024






 








 






(in thousands)








Net income (loss) (GAAP)






$






32,511






 






 






$






(40,216






)






 






$






(103,265






)






 






$






(187,123






)








Change in fair value of equity investments






 






(46,999






)






 






 






22,080






 






 






 






(48,174






)






 






 






(5,683






)








Other income






 






(3,131






)






 






 






(3,539






)






 






 






(16,396






)






 






 






(17,902






)








Income tax expense






 






462






 






 






 






963






 






 






 






939






 






 






 






1,412






 








Depreciation and amortization






 






1,437






 






 






 






1,633






 






 






 






6,022






 






 






 






6,159






 








Stock-based compensation






 






9,950






 






 






 






12,479






 






 






 






42,997






 






 






 






49,903






 








Reorganization expense (a)






 






521






 






 






 






—






 






 






 






2,581






 






 






 






—






 








Litigation and settlement (income) expense (b)






 






—






 






 






 






(18






)






 






 






390






 






 






 






705






 








Adjusted EBITDA






$






(5,249






)






 






$






(6,618






)






 






$






(114,906






)






 






$






(152,529






)









(a)








Represents costs in connection with restructuring, consisting of severance payments, employee benefits, and related costs.



(b)








Represents costs related to a derivative action and a settlement with a royalty partner, neither of which we consider to be representative of our underlying operating performance.


 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260225969788/en/
Jaren Madden (Investors and Media)

Schrödinger, Inc.

jaren.madden@schrodinger.com

617-286-6264


Matthew Luchini (Investors)

Schrödinger, Inc.

matthew.luchini@schrodinger.com

917-719-0636


Original: Schrödinger Reports Fourth Quarter and Full-Year 2025 Financial Results