Schrödinger (SDGR) Q4 2025 earnings summary

Executive summary

• Achieved 23% year-over-year revenue growth to $255.9 million in 2025, with software revenue at $199.5 million (up 10.6%-11%) and drug discovery revenue doubling to $56.4 million.

• Maintained a strong cash position of $402.3 million at year-end 2025, supporting growth and investment.

• Accelerated transition to a hosted software model, targeting 75% hosted revenue by 2028 for more predictable financials.

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

• Advanced therapeutics portfolio with progress in clinical studies, expanded partnerships, and positive milestones.

Financial highlights

• Software gross margin was 74% for the year (down from 80% in 2024); Q4 2025 margin was 81%.

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

• Adjusted EBITDA improved to $(114.9) million for 2025 from $(152.5) million in 2024.

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

• Deferred revenue at year-end was $191.7 million.

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 due to realized efficiencies.

• Targeting positive adjusted EBITDA by year-end 2028 and near-complete transition to hosted contracts.

• Annual drug discovery revenue targeted at ~$50 million and high-seventies gross margin by 2028.