Schrödinger (SDGR) Bank of America Global Healthcare Conference 2026 summary

Financial performance and outlook

• Slightly exceeded Q1 guidance, with broad-based growth from both existing and new customers, and strong interest in new products.

• Noted a positive shift in customer funding dynamics, with fewer customer losses and more new logos added compared to last year.

• Operating expenses were down 4% quarter-over-quarter, supporting a path toward profitability over a three-year period.

• Hosted revenue rose to 34% of total software revenue, up from 24% a year ago, with a target of 75% by 2028.

• Software ACV guidance for Q2 is $19M–$23M, representing 4%–27% growth year-over-year on a comparable basis.

Hosted transition and business model evolution

• Transition from on-premises to hosted solutions is progressing smoothly, with minimal customer resistance and increasing demand from large pharma.

• Hosted adoption is broad-based across customer segments, with both large and small companies participating.

• The 75% hosted revenue target is based on current customer and geographic evaluations, with potential for further growth as new products are introduced.

• As hosted adoption increases, the gap between ACV and revenue is expected to shrink and eventually converge.

Product innovation and technology development

• Predictive toxicology is gaining traction, with customers using it earlier in drug discovery, potentially increasing usage scale and revenue impact.

• The tox panel currently covers about 100 targets, with ongoing expansion toward 150–200 to address broader needs.

• FEP+ remains a core technology for affinity prediction, with related solutions for solubility and permeability also highlighted.

• Significant investment in protein structure prediction and enterprise informatics (LiveDesign), which is widely adopted in the industry.

• New offerings include LiveDesign for Biologics and Bunsen, an agentic AI tool aimed at boosting computational chemist productivity.