Key Highlights

  • Revenue was USD 64.49 million against a USD 47.73 million estimate, with EPS of USD -0.50 against USD -0.67.
  • Drug discovery Revenue was USD 24.19 million against USD 13.01 million; software was USD 38.15 million against USD 35.93 million.
  • Hosted software revenue was USD 17.24 million against USD 11.59 million; on-premise was USD 13.37 million against USD 15.93 million.
  • Cash, restricted cash and marketable securities were USD 373.4 million, which management said funds operations for 24 months or more.

Schrödinger (NASDAQ:SDGR) reported third quarter revenue of USD 64.49 million, against USD 54.32 million a year earlier and an estimate of USD 47.73 million. The company stated revenue was up 19%. EPS was USD -0.50 against an estimate of USD -0.67, on a net loss of USD 37.7 million.

Revenue, Costs and Loss in the Quarter

Gross profit was USD 38.25 million against USD 28.04 million. Operating expenses were USD 64.38 million against USD 73.99 million, including Research and Development of USD 34.09 million against USD 42.76 million. Loss from operations was USD 26.13 million against USD 45.95 million.

Net loss was USD 37.7 million, or USD 0.50 per share, compared with USD 32.8 million, or USD 0.45, a year earlier. Other expense included a USD 14.75 million negative change in the Fair Value of Equity investments.

Software, Drug Discovery and Contribution Revenue

Software revenue was USD 38.15 million against USD 35.93 million, a rise the company stated as 6%. Within it, hosted software was USD 17.24 million, up from USD 11.59 million, while on-premise software was USD 13.37 million against USD 15.93 million. Annual contract value, a supplemental software metric, was USD 44.7 million against USD 38.3 million.

Management said customers are moving from on-premise to hosted contracts, which recognize revenue over the contract term, and projects near-term revenue to decline as the transition progresses.

Drug discovery revenue was USD 24.19 million against USD 13.01 million. Contribution revenue, which comes from Gates-related agreements, was USD 2.15 million against USD 5.39 million.

Ajax, Novartis and Pipeline Events

In June, Eli Lilly and Company acquired Ajax Therapeutics, which Schrödinger co-founded. The company received approximately USD 57.2 million in cash, made up of USD 47.2 million for its equity stake and a USD 10.0 million collaboration milestone, and it is eligible for further payments tied to clinical and regulatory milestones.

In September, an amendment to the Novartis collaboration replaced certain programs with two new ones, with eligibility for up to USD 1.424 billion in total milestones. In August the company licensed two early-stage programs to Tectora Therapeutics, a newly formed company it co-founded, receiving an equity stake.

On its own pipeline, the company said it does not intend to start additional independent Clinical Trials beyond the ongoing Phase 1 studies of SGR-1505 and SGR-3515, and plans to explore partnerships for both programs.

Cash Position and Product Plans

Cash, cash equivalents, restricted cash and marketable securities were USD 373.4 million at September 30. Management said that amount is sufficient to fund operating expenses and Capital Expenditure for at least the next 24 months.

On products, the early access version of Bunsen, an agentic AI co-scientist, launched in July, and management named the end of 2026 for the full commercial version.

Figures Worth Comparing

Revenue of USD 64.49 million sits alongside a net loss of USD 37.7 million, drug discovery revenue of USD 24.19 million and cash of USD 373.4 million. Annual contract value stands at USD 44.7 million.

Dated items management named include the full commercial release of Bunsen by the end of 2026, the Gates Ventures agreement extended through August 13, 2027, and the Gates Foundation toxicity initiative extended through April 2027.