On May 7, 2025 Schrödinger, Inc. (Nasdaq: SDGR) reported financial results for the quarter ended March 31, 2025 (Press release, Schrodinger, MAY 7, 2025, View Source [SID1234652649]).
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"We are very pleased with Schrödinger’s performance in the first quarter of 2025, with strong software and drug discovery revenue growth. Our proprietary pipeline is progressing, and we are looking forward to reporting initial data from the Phase 1 clinical study of SGR-1505 next month," said Ramy Farid, Ph.D., chief executive officer of Schrödinger. "More broadly, the pharmaceutical industry and even regulatory agencies are seeking to increase usage of computational solutions in R&D, and we continue to fortify our position as a scientific powerhouse in this field. With our growing software business and advancing pipeline of collaborative and proprietary programs, we believe we have a solid foundation that positions us for long-term growth."
First Quarter 2025 Financial Results
•Total revenue for the first quarter increased 63% to $59.6 million, compared to $36.6 million in the first quarter of 2024.
•Software revenue for the first quarter increased 46% to $48.8 million, compared to $33.4 million in the first quarter of 2024. The increase was primarily due to early renewals by large customers as well as increases in hosted contracts and contribution revenue.
•Drug discovery revenue was $10.7 million for the first quarter, compared to $3.2 million in the first quarter of 2024. First quarter 2025 drug discovery revenue included the recognition of $5.7 million from the company’s collaboration with Novartis.
•Software gross margin was 72% for the first quarter, compared to 76% in the first quarter of 2024, primarily reflecting the costs associated with the company’s predictive toxicology initiative.
•Operating expenses were $82.0 million for the first quarter, compared to $86.3 million for the first quarter of 2024. The decrease was primarily due to lower R&D expenses.
•Other expense was $8.9 million for the first quarter, which included changes in fair value of equity investments and interest income/expense, compared to other income of $13.2 million for the first quarter of 2024.
•Net loss for the first quarter was $59.8 million, compared to $54.7 million in the first quarter of 2024.
Three Months Ended
March 31,
2025 2024 % Change
(in millions)
Total revenue $ 59.6 $ 36.6 63%
Software revenue 48.8 33.4 46%
Drug discovery revenue 10.7 3.2 237%
Software gross margin 72 % 76 %
Operating expenses $ 82.0 $ 86.3 (5.0)%
Other (expense) income $ (8.9) $ 13.2 —
Net loss $ (59.8) $ (54.7) —
For the three months ended March 31, 2025, Schrödinger reported a net loss of $59.8 million, compared to a net loss of $54.7 million for the three months ended March 31, 2024.
For the three months ended March 31, 2025, Schrödinger reported a non-GAAP net loss of $46.7 million, compared to a non-GAAP net loss of $62.4 million for the three months ended March 31, 2024. See "Non-GAAP Information" below and the table at the end of this press release for a reconciliation of non-GAAP net loss to GAAP net loss.
2025 Financial Outlook
As of May 7, 2025, Schrödinger maintained its previously issued financial guidance for the fiscal year ending December 31, 2025:
•Software revenue growth is expected to range from 10% to 15%.
•Drug discovery revenue is expected to range from $45 million to $50 million.
•Software gross margin is expected to range from 74% to 75%.
•Operating expense growth in 2025 is expected to be less than 5%.
•Cash used for operating activities in 2025 is expected to be significantly lower than cash used for operating activities in 2024.
For the second quarter of 2025, software revenue is expected to range from $38 million to $42 million.
Key Highlights
Proprietary and Collaborative Pipeline
•Schrödinger continues to progress the Phase 1 clinical study of SGR-1505, the company’s MALT1 inhibitor, in patients with relapsed/refractory B-cell malignancies and expects to report initial clinical data from the trial in June.
•Schrödinger is continuing to progress the Phase 1 clinical study of SGR-2921, its CDC7 inhibitor, in patients with AML and myelodysplastic syndrome (MDS). The company expects to report initial data from this trial at a medical meeting in the second half of 2025.
•Schrödinger is continuing to progress the Phase 1 clinical study of SGR-3515, the company’s Wee1/Myt1 co-inhibitor, in patients with advanced solid tumors. Initial clinical data from this study are expected in the second half of 2025. In April, Schrödinger presented preclinical data at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting demonstrating that SGR-3515 has improved anti-tumor activity in preclinical models compared to known Wee1 and Myt1 monotherapy inhibitors.
•Also at the AACR (Free AACR Whitepaper) Annual Meeting, Schrödinger presented initial preclinical data for SGR-4174, the company’s investigational SOS1 inhibitor. The preclinical data demonstrated that SGR-4174 exhibited potent and selective SOS1 inhibition and has strong tumor growth inhibition as a monotherapy and in combination with MEK or KRAS inhibitors.
Platform
•In April, the company issued a statement following the FDA’s announcement outlining plans to reduce existing animal testing requirements for monoclonal antibodies and other drugs with new approaches, including computation. Schrödinger is advancing its predictive toxicology initiative focused on small molecules, which is expected to be available to customers in the second half of 2025. The company currently offers computational solutions for small molecules and biologics that can be used to evaluate selectivity and the potential for off-target interactions.
•In March, Schrödinger scientists published research in Nature Communications describing a novel, computational crystal structure prediction (CSP) method that predicts crystal polymorphs with a high degree of accuracy and reliability. The ability to quickly and accurately predict crystal polymorphs has important applications for drug formulation.
Corporate
•In March, Schrödinger appointed Bridget van Kralingen to its Board of Directors. Ms. van Kralingen brings more than 35 years of experience leading and growing global technology solution and software businesses and is currently a senior partner at Motive Partners, an investment firm focused on technology-enabled companies. Prior to Motive Partners, Ms. van Kralingen spent nearly 18 years in a variety of executive roles at IBM, including as chief executive/senior vice president of IBM Global Markets and as chief executive of IBM’s Industry Platforms software division.
Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its first quarter 2025 financial results on Wednesday, May 7, 2025, at 4:30 p.m. ET. The live webcast can be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source To participate in the live call, please register for the call here. It is recommended that participants register at least 15 minutes in advance of the call. Once registered, participants will receive the dial-in information. The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.