Schrödinger (SDGR) Leerink Global Healthcare Conference 2026 summary

Transition to ACV and revenue recognition

• Shift to ACV (Annual Contract Value) reflects operational reality and enhances revenue visibility, with no operational change but an acceleration toward hosted contracts.

• Hosted contracts are recognized ratably, causing a temporary decline in revenue for 2026, while ACV is expected to grow 10%-15% annually.

• Over a three-year period, revenue and ACV are expected to align as the transition completes.

• ACV growth is a transparent indicator of business health, with no mechanism to obscure performance.

Partnerships, collaborations, and industry impact

• Track record includes $650 million in cash from equity stakes, milestones, and upfronts over five years, with 16 clinical programs generating royalties.

• Success in collaborations has driven industry-wide adoption of computational drug discovery, benefiting both software and partnership businesses.

AI disruption and proprietary technology

• AI is not expected to replace physics-based engines or the proprietary software developed over decades.

• Proprietary knowledge and the ability to generate new data for each problem are key differentiators, making foundational AI models for chemistry unfeasible.

• AI is used internally to improve efficiency but is not a threat to core offerings.