On February 26, 2025 Schrödinger, Inc. (Nasdaq: SDGR) reported financial results for the fourth quarter and full-year ended December 31, 2024, and provided its financial outlook for 2025 (Press release, Schrodinger, FEB 26, 2025, View Source [SID1234650640]).
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"We are delighted with Schrödinger’s excellent financial performance in 2024. Software revenue growth exceeded our expectations, showing the resilience of our business through changing industry cycles and the impact of large contract renewals. Our drug discovery collaboration portfolio is expanding, driven by our new agreement with Novartis and expanded collaborations with Otsuka and Lilly, and we expect to report initial clinical data from our three lead proprietary programs this year," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "We continue to see increasing momentum and conviction around our validated computational methods and are committed to remaining scientific leaders in this area. With our platform, our collaborations, our programs, and our strong financial position, we believe we are well positioned to deliver across all facets of our business in 2025 and beyond."
Today Schrödinger also announced that it has expanded its research collaboration with Eli Lilly and Company. This expansion builds on the companies’ previously announced collaboration, with the addition of an undisclosed target. The terms of the expanded collaboration are consistent with the previously announced agreement.
Fourth Quarter 2024 Financial Results
•Total revenue for the fourth quarter increased 19.1% to $88.3 million, compared to $74.1 million in the fourth quarter of 2023.
•Software revenue for the fourth quarter increased 16.0% to $79.7 million, compared to $68.7 million in the fourth quarter of 2023. The increase was primarily due to increased hosted revenue from large customers with additional contribution from new multi-year customer agreements.
•Drug discovery revenue was $8.7 million for the fourth quarter, compared to $5.5 million in the fourth quarter of 2023. The increase was primarily due to the recognition of milestones during the quarter.
•Software gross margin decreased to 83% for the fourth quarter, compared to 87% in the fourth quarter of 2023, primarily reflecting higher cost of revenue associated with the predictive toxicology initiative.
•Operating expenses were $84.8 million for the fourth quarter, compared to $87.2 million for the fourth quarter of 2023.
•Other expense, which includes changes in fair value of equity investments and interest income/expense, was $18.5 million for the fourth quarter, compared to $1.9 million for the fourth quarter of 2023.
•Net loss for the fourth quarter was $40.2 million, compared to $30.7 million in the fourth quarter of 2023.
Three Months Ended
December 31,
2024 2023 % Change
(in millions)
Total revenue $ 88.3 $ 74.1 19%
Software revenue 79.7 68.7 16%
Drug discovery revenue 8.7 5.5 58%
Software gross margin 83 % 87 %
Operating expenses $ 84.8 $ 87.2 (2.7)%
Other expense $ (18.5) $ (1.9) —
Net loss $ (40.2) $ (30.7) —
Full Year 2024 Financial Results
•Total revenue for the full year decreased 4.2% to $207.5 million, compared to $216.7 million for 2023.
•Software revenue for the full year increased 13.3% to $180.4 million, compared to $159.1 million for 2023. Revenue growth was primarily driven by increases in hosted contracts and contribution revenue.
•Drug discovery revenue for the full year was $27.2 million compared to $57.5 million for 2023. The first quarter of 2023 included the recognition of a $25 million milestone from BMS.
•Software gross margin was 80% for the full year, compared to 81% for 2023.
•Operating expenses were $341.4 million for the full year, compared to $318.1 million for 2023, primarily due to higher research and development expenses.
•Other income, which includes gains/loss on equity investments, changes in fair value of such investments and interest income/expense, was $23.6 million for the full year, compared to $220.4 million for 2023.
•Net loss for the full year was $187.1 million, compared to income of $40.7 million for 2023.
•At December 31, 2024, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately $367.5 million, compared to approximately $398.4 million at September 30, 2024 and approximately $468.8 million at December 31, 2023. In January 2025, Schrodinger received the $150 million upfront payment from Novartis for the recently announced drug discovery collaboration.
Twelve Months Ended
December 31,
2024 2023 % Change
(in millions)
Total revenue $ 207.5 $ 216.7 (4.2)%
Software revenue 180.4 159.1 13%
Drug discovery revenue 27.2 57.5 (53)%
Software gross margin 80 % 81 %
Operating expenses $ 341.4 $ 318.1 7.3%
Other income $ 23.6 $ 220.4 —
Net (loss) income $ (187.1) $ 40.7 —
For the three months and year ended December 31, 2024, Schrödinger reported net losses of $40.2 million and $187.1 million, respectively, compared to a net loss of $30.7 million and net income of $40.7 million for the three months and year ended December 31, 2023, respectively.
For the three months and year ended December 31, 2024, Schrödinger reported non-GAAP net losses of $17.2 million and $191.4 million, respectively, compared to non-GAAP net losses of $23.0 million and $157.8 million
for the three months and year ended December 31, 2023, respectively. See "Non-GAAP Information" below and the table at the end of this press release for a reconciliation of non-GAAP net income (loss) to GAAP net income (loss).
Full Year 2024 Key Performance Indicators (KPIs)
Schrödinger today reported 2024 key performance indicators for both the software and drug discovery components of its business.
Software. Total annual contract value (ACV) increased 23.7% to $190.8 million, and the ACV of Top 10 customers increased 43% to $73.1 million. The number of customers with an ACV of at least $5 million increased from four to eight, and the number of customers with an ACV of at least $1 million increased from 27 to 31. Schrödinger’s customer retention rate among customers with an ACV of at least $500,000 was 100% and the number of such customers increased from 54 to 61.
Drug discovery. Schrödinger ended 2024 with 13 ongoing programs eligible for royalties, compared to 12 the previous year. For the year ended December 31, 2024, the number of collaborators since 2018 increased to 19.
Software KPI 2024 2023
Total annual contract value (ACV) $190.8 million $154.2 million
ACV of Top 10 customers $73.1 million $51.0 million
Number of customers with at least $5M in ACV 8 4
Number of customers with at least $1M in ACV 31 27
Number of customers with at least $500,000 in ACV 61 54
Number of customers with at least $100,000 in ACV 235 222
Customer retention rate with at least $500,000 in ACV 100% 98%
Customer retention with at least $100,000 in ACV 95% 92%
Number of active customers with ACV of at least $1,000 1,752 1,785
Drug Discovery KPI 2024 2023
Ongoing programs eligible for royalties 13 12
Number of collaborators since 2018 19 17
For additional information about the company’s KPIs, see "Operating Metrics" below.
2025 Financial Outlook
As of February 26, 2025, Schrödinger provided the following expectations for the fiscal year ending December 31, 2025:
•Software revenue growth is expected to range from 10% to 15%.
•Drug discovery revenue is expected to range from $45 million to $50 million.
•Software gross margin is expected to range from 74% to 75%.
•Operating expense growth in 2025 is expected to be less than 5%.
•Cash used for operating activities in 2025 is expected to be significantly lower than cash used for operating activities in 2024.
For the first quarter of 2025, software revenue is expected to range from $44 million to $48 million.
Key Highlights
Collaborative Pipeline & Co-Founded Companies
•Earlier today, the company announced an expanded research collaboration with Lilly. The expansion adds an undisclosed target to the companies’ previously announced collaboration under terms consistent with the existing agreement.
•In January, Schrödinger announced that its research collaboration with Novartis received antitrust regulatory clearance, and Schrödinger received the upfront payment of $150 million from Novartis in January 2025.
•Also in January, the company announced an expanded research collaboration agreement with Otsuka Pharmaceutical Co., Ltd. The expansion adds another undisclosed target to the collaboration under terms consistent with the existing agreement.
•In December, Ajax Therapeutics, a company co-founded by Schrödinger, presented an overview poster of its ongoing Phase 1 trial evaluating AJ1-11095 for the treatment of myelofibrosis at the 66th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition.
•Also in December, Structure Therapeutics, a company co-founded by Schrödinger, announced the selection of ACCG-2671, as its lead oral small molecule amylin receptor agonist for the treatment of obesity. Schrödinger collaborated with Structure on the discovery of ACCG-2671 and is entitled to milestones and low single-digit royalties on sales.
Proprietary Pipeline
•In January, the U.S. Food and Drug administration granted SGR-2921, the company’s CDC7 inhibitor, Orphan Drug Designation for the treatment of acute myeloid leukemia (AML). Schrödinger expects to present initial clinical data from the ongoing Phase 1 study of SGR-2921 in patients with AML and myelodysplastic syndrome (MDS) in the second half of 2025.
•Schrödinger continues to progress the Phase 1 clinical study of SGR-1505, the company’s MALT1 inhibitor, in patients with relapsed/refractory B-cell malignancies and expects to report initial clinical data from the trial in the second quarter of 2025.
•The Phase 1 study of SGR-3515, Schrödinger’s Wee1/Myt1 inhibitor, continues to enroll patients with advanced solid tumors at sites in the U.S. and Canada. Initial clinical data from this study is expected in the second half of 2025.
Platform
•The company is continuing to advance the science underpinning its platform, including advancing its predictive toxicology initiative, further integrating physics and AI/ML into platform workflows, and expanding the applicability of the platform to new high-value areas, including biologics and drug formulations.
•In January, Schrödinger scientists published a paper assessing the accuracy of free-energy perturbation (FEP) in predicting relative binding energies of ligands to DNA and RNA targets. The assessment suggests FEP+ has sufficient accuracy to guide lead optimization in drug discovery programs targeting nucleic acids.
Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its fourth quarter and full year 2024 financial results on Wednesday, February 26, 2025, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source 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.