Schrödinger, Inc. (SDGR) SEC Filings & Earnings Calls

Software revenue declined 10% due to hosted transition, which may pressure near-term revenue.

“Software revenue $32.5M, -10% YoY.”

Drug discovery revenue includes a one-time $10M milestone, not recurring.

“Drug discovery revenue includes $10M milestone from Ajax acquisition.”

Software revenue decline

“Software products and services revenue -10% YoY.”

Dependence on milestone payments

“Drug discovery revenue growth driven by $10.0M milestone payment; such payments are non-recurring.”

Equity investment volatility

“Change in fair value of equity investments $45.9M in Q2 2026 vs $4.6M in Q2 2025, driven by unrealized gains.” · word for word

Milestone payments are contingent on clinical and regulatory achievements, introducing uncertainty.

“eligible to receive additional cash payments upon the achievement by Ajax of specified clinical and regulatory milestones” · word for word

Potential shareholder dilution from increased equity plan shares.

“increases the number of shares of common stock of the Company available for issuance under the 2022 Equity Incentive Plan by 3,000,000 shares.”

Loss of Chief Commercial Officer may disrupt sales and marketing efforts.

“separation of Mannix Aklian as Chief Commercial Officer, Global Head of Software Sales and Marketing”

Key executive departure may disrupt sales and marketing operations.

“CCO departure effective immediately; interim replacement while searching for permanent.”

Software revenue decline from on-premise to hosted shift

“The decrease in revenues for on-premise software ... was primarily attributable to ... customers switching from on-premise to hosted software purchases” · word for word

Drug discovery revenue lumpiness from collaborator program discontinuation

“Lilly's election not to proceed with further development for one program under the collaboration, which resulted in increased revenue recognition due to the accelerated completion of our obligations related to such program” · word for word

Equity investment volatility from Structure Therapeutics

“The change in fair value of equity investments during the three months ended March 31, 2026 was due to an unrealized loss on our investment in Structure Therapeutics of $13.5 million.” · word for word

Transition to hosted software licensing may pressure near-term software revenue and margins.

“Software revenue decreased 21% due to planned accelerated transition to hosted software licensing.”

Drug discovery revenue volatility due to program discontinuations and deferred revenue recognition.

“Drug discovery revenue increase due to accelerated recognition of deferred revenue associated with discontinuation of one collaboration program.”

Significant underwater stock option overhang

“Of the 12,395,566 stock options outstanding as of April 1, 2026, a significant portion are 'underwater,' ... 11,101,981 options are 'underwater,' with exercise prices per share that exceed the closing price of our common stock on April 1, 2026. ... The 11,101,981 stock options that are underwater accounted for 59.39% of our overhang as of April 1, 2026.” · word for word

Dilution from equity compensation

“If the 2026 Plan Amendment is approved, the new shares of common stock reserved under the Amended Plan would represent approximately 4.02% of our 65,383,310 outstanding shares of common stock ... our overhang at April 1, 2026 was 25.07%. If the 3,000,000 shares proposed to be authorized for grant under the 2026 Plan Amendment are included in the calculation,” · word for word

Reliance on equity for talent retention

“If the 2026 Plan Amendment is not approved by our stockholders, our inability to make competitive equity awards to retain talented employees in a highly competitive market would likely have an adverse impact on our business.” · word for word

Transition to hosted software may cause short-to-medium term revenue declines.

“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.” · word for word

Drug discovery revenue is milestone-driven and variable.

“Drug discovery revenue is expected to range from $55 million to $65 million, with potential variability each year due to milestone-driven timing.” · word for word

Software revenue growth guidance lowered to 8-13% from 10-15% due to pharma scale-up timing.

“lowered our software revenue growth guidance by two percent to 8% to 13%” · word for word

Customer concentration in life sciences

“A significant portion of our current software sales are to customers in the life sciences industry, in particular the biopharmaceutical industry.” · word for word

Dependence on Novartis collaboration

“The increase in revenues for drug discovery services ... was primarily due to the Novartis collaboration services that began in November 2024.” · word for word

Clinical development risk

“Clinical drug development involves a lengthy and expensive process, with an uncertain outcome.” · word for word

Competition from AI drug discovery companies

“We are facing increasing competition from companies utilizing artificial intelligence, or AI, and other computational approaches for drug discovery.” · word for word

Software renewal risk

“If our existing customers do not renew their licenses, do not buy additional solutions from us, or renew at lower prices, our business and operating results will suffer.” · word for word