Schrödinger (SDGR) Q4 2025 earnings summary

Executive summary

• Achieved 23% year-over-year revenue growth to $256 million in 2025, with software revenue at $199.5 million (up 10.6–11%) and drug discovery revenue doubling to $56.4 million.

• Strong cash position of $402.3 million at year-end 2025 supports investment in growth 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 a hosted, cloud-based software model, targeting 75% hosted revenue by 2028 for more predictable financials.

• Therapeutics portfolio advancing, with multiple clinical programs and significant future milestone and royalty potential.

Financial highlights

• Software revenue grew 10.6–11% year-over-year to $199.5 million; drug discovery revenue more than doubled to $56.4 million.

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

• Operating expenses decreased 9–9.3% to $309.5–310 million, reflecting cost reduction initiatives.

• Net loss narrowed to $103.3 million from $187.1 million in 2024; adjusted EBITDA improved to $(114.9) million from $(152.5) million.

• Total other income was $64.6–65 million, up from $24 million, driven by equity investments and currency gains.

Outlook and guidance

• 2026 software ACV guidance: $218–$228 million, representing 10–15% growth; Q1 2026 ACV expected at $24–$28 million.

• Drug discovery revenue for 2026 projected at $55–$65 million.

• Operating expenses expected to be lower in 2026 as cost reductions are realized.

• Targeting positive adjusted EBITDA by end of 2028, with gross margins returning to high 70s.

• 2028 objectives include near-complete transition to hosted contracts and durable 10–15% annual software ACV growth.