Schrödinger (SDGR) Q4 2025 earnings summary

Executive summary

• Achieved 23% year-over-year revenue growth to $255.9 million in 2025, with software revenue up 10.6% to $199.5 million and drug discovery revenue more than doubling to $56.4 million.

• Maintained a strong cash position of $402.3 million at year-end 2025, supporting growth investments and transition to hosted software.

• Net loss narrowed to $103.3 million from $187.1 million in 2024, with Q4 2025 net income of $32.5 million.

• Accelerated transition to hosted, ratable software revenue model, targeting 75% hosted revenue by 2028.

• Advanced therapeutics portfolio with progress in clinical milestones, including positive Phase 3 data for zasocitinib and expanded collaborations.

Financial highlights

• Software revenue reached $199.5 million (+10.6% YoY); drug discovery revenue was $56.4 million (+107% YoY); total revenue was $255.9 million (+23% YoY).

• Software gross margin was 74% for the year and 81% in Q4 2025, down from 80% in 2024.

• Operating expenses decreased by 9% to $309.5 million, reflecting cost reduction initiatives.

• Net loss narrowed to $103.3 million from $187.1 million in 2024.

• Other income, including gains on equity investments, totaled $64.6 million for the year.

Outlook and guidance

• 2026 software ACV guidance: $218 million–$228 million (10–15% growth); drug discovery revenue: $55 million–$65 million.

• Operating expenses in 2026 expected to be lower than 2025.

• Targeting 10–15% annual software ACV growth, $50 million annual drug discovery revenue, and positive adjusted EBITDA by year-end 2028.

• Transitioning to 75% hosted software revenue by 2028 for more predictable revenue and high-70s gross margin.

• Path to positive adjusted EBITDA by end of 2028, assuming biotech market recovery.