Schrödinger targets 10%-15% ACV growth through accelerated hosted transition and platform innovation
View original at seekingalpha.comSchrödinger targets 10%-15% ACV growth through accelerated hosted transition and platform innovation Earnings Call Insights: Schrödinger (SDGR) Q4 2025 MANAGEMENT VIEW * CEO Ramy Farid stated that Schrödinger "is the leader in advancing and deploying computational methods for molecular discovery," emphasizing the compa…
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Q1 2026 ACV expected to be $24 million to $28 million compared to $25 million from Q1 2025
80% confidenceACV and revenue are actually quite different
80% confidenceSchrödinger had a strong 2025 delivering $256 million of revenue or 23% growth against a challenging backdrop of tight pharma budgets and challenging biotech capital markets
80% confidenceNew products including predictive tox are reaching new end customers and new touch points within existing customers
80% confidenceThe company achieved 23% total revenue growth and has a strong cash position of $402 million for 2025
80% confidenceSchrödinger is the leader in advancing and deploying computational methods for molecular discovery
80% confidenceProfitability by 2028 depends on growth across the software business of about 10% to 15% a year and drug discovery revenue of about $50 million a year
80% confidenceSoftware gross margin of 74% compared to 80% in 2024 due to hosted deployment transition
80% confidenceDrug discovery revenue for 2026 anticipated between $55 million and $65 million
80% confidenceSchrödinger is working with Anthropic directly to explore ways to integrate agentic AI with computational solutions
80% confidence2026 ACV guidance is $218 million to $228 million representing 10% to 15% growth
80% confidenceExpects 10% to 15% software ACV growth, operating with expense discipline, and accelerating transition to primarily hosted model
80% confidenceWe're definitely looking forward to predictive toxicology launch and expecting growth from it as well as new products
80% confidenceTargets include annual software ACV growth of 10% to 15%, substantially completing transition to hosted contracts, and returning gross margin percentage to the high 70s
80% confidenceA number of new products fit profile of reaching new end customers and new touch points within existing customers
80% confidenceQ1 tends to be one of the smaller quarters following the Q4 season
80% confidencePartnering pipeline assets is an ongoing and active component of business
80% confidenceTotal ACV increased to $198.5 million with notable 15% growth within top 20 pharma relationships
80% confidenceTransition to hosted contracts has no impact to ACV or cash flows
80% confidenceTotal operating expenses were $310 million, a decrease of approximately 9% compared to 2024
80% confidenceCustomers are increasingly preferring hosted deployments
80% confidenceDrug discovery business generated $56.4 million of revenue from portfolio of collaborative programs
80% confidenceSoftware business generated $199.5 million of software revenue and $198.5 million of software ACV with strong growth from commercial customers
80% confidenceNet dollar retention fell to 100% after several years averaging over 110%
80% confidenceOperating expenses expected to be less than 2025 as company fully realizes annualized impact of expense reductions
80% confidenceSchrödinger is uniquely positioned to lead the next era of molecular discovery by scaling physics plus AI platform across a multi-billion-dollar growing market
80% confidenceSoftware revenue increased 11% and drug discovery revenue more than doubled compared to the prior year
80% confidenceWe are really confident about our future and the opportunities ahead
80% confidence