Schrodinger Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −8.32%.
Did SDGR Beat Earnings? Q4 2025 Results
Schrödinger delivered a striking Q4 2025 earnings beat, posting adjusted EPS of $0.54 against a consensus estimate of negative $0.09, a 700.00% positive surprise, while revenue of $87.20 million edged past the $83.66 million consensus by 4.24%, even as total revenue slipped 1.3% year over year. The headline profitability was driven largely by $50.10 million in other income, including significant fair-value gains on equity investments, which powered a swing to GAAP net income of $32.51 million from a net loss of $40.22 million in the prior-year quarter. Underlying that result, drug discovery revenue more than doubled to $18.00 million, partially offsetting a 13% year-over-year decline in software revenue to $69.30 million tied to the timing of prior multi-year deals. The company is accelerating a transition to hosted software contracts that will pressure reported revenue near term but improve predictability, with management targeting 10% to 15% annual ACV growth, software ACV of $218.00 million to $228.00 million in 2026, and positive adjusted EBITDA by 2028.
- 23.3% total revenue growth for full year 2025
- Drug discovery revenue more than doubled year-over-year for the full year
- Q4 net income swing driven by $50.1 million in other income including equity investment gains
- Operating expenses decreased 9.3% for full year and 12.2% for Q4
- Top 20 Pharma ACV grew 15.3% to $80.8 million
- 96% gross dollar retention rate for commercial customers
“Schrödinger's performance in 2025, marked by 23% total revenue growth and 11% software revenue growth, is a testament to the resilience of our business and the unique value we provide. While the drug discovery AI landscape is expanding rapidly, we differentiate ourselves by consistently delivering outsized real-world impact, validated by continued robust customer engagement, high customer retention, and a strong track record of highly differentiated development candidates across our collaborative and internal therapeutics portfolio. Our success is enabled by our transformative platform that integrates ground-truth, physics-based simulation with leading-edge AI and machine learning. Looking ahead to 2026, we are poised to scale our impact through new platform enhancements and the commercial launch of our predictive toxicology solution.”
Schrodinger CEO, on the earnings call
Forward Guidance & Outlook
For fiscal year 2026, Schrödinger expects software ACV of $218 million to $228 million (10-15% growth over 2025), drug discovery revenue of $55 million to $65 million, and operating expenses less than 2025 levels. For Q1 2026, software ACV is expected to range from $24 million to $28 million ($197 million to $201 million on a trailing four-quarter basis). By 2028, the company targets positive adjusted EBITDA, durable 10-15% annual software ACV growth, substantial completion of the hosted software transition, software gross margin returning to the high 70s percentage range, and approximately $50 million in annual drug discovery revenue.
SDGR YoY Financials
SDGR Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.