Schrödinger, Inc.

What they do

Schrodinger licenses a physics-based computational platform that predicts molecular properties for drug and materials discovery, selling to biopharmaceutical companies, industrial customers, academic institutions, and government labs. It also applies the platform to collaborative and proprietary drug discovery programs through its therapeutics group. Operations are reported in two segments: software and drug discovery, with contribution revenue presented separately.

Revenue drivers

• Software segment — Software revenue includes product licenses, hosted subscriptions, maintenance, professional services, and contributions. Software revenue was $32.5 million in Q2 2026, down 10%, with hosted representing 47% of software revenue.
• Drug discovery segment — Generates revenue from preclinical and clinical programs run internally and with collaborators, including milestone payments. Drug discovery revenue was $23.0 million in Q2 2026 versus $13.9 million a year earlier, driven by a $10 million Ajax-related collaboration milestone.
• Contribution revenue — Reported separately from software and drug discovery, tied to grant-funded work such as the Gates Foundation predictive toxicology and Gates Ventures battery project grants. It was $3.4 million in Q2 2026, down from $4.8 million, on grant timing.
• Top 20 pharma cohort — In 2025 all top 20 pharma companies licensed Schrodinger solutions, accounting for $73.7 million, or 37%, of software revenue and $80.8 million, or 41%, of ACV.

Recent performance

For Q2 2026, total revenue was $58.9 million, up 8%, with drug discovery revenue of $23.0 million and software revenue of $32.5 million. ACV was $29.6 million, up 27%, and $208 million on a trailing four-quarter basis; ACV excluding contribution ACV was $22.6 million, up 23%. Net income was $6.0 million compared with a net loss of $43.2 million, helped by $48.9 million of other income tied to the Ajax acquisition. Software gross margin was 71%, and operating expenses fell 6%. Cash, cash equivalents, restricted cash and marketable securities were $418.8 million.

Strategy

Schrodinger is accelerating a transition to hosted software licensing, which reduced reported software revenue and software gross margin in the quarter. It launched an early access version of Bunsen, an agentic AI co-scientist built to run its physics-based platform, with NVIDIA and Google Cloud providing infrastructure and NVIDIA BioNeMo Agent Toolkit access. It announced a strategic software agreement with Bristol Myers Squibb to deploy Bunsen and expand platform scale within BMS research. It continues to advance collaborative and proprietary drug discovery programs, including milestone-linked economics such as the Ajax acquisition.

Risks

• Hosted licensing transition — The accelerated shift to hosted software licensing reduced software revenue 10% and software gross margin to 71% in Q2 2026.
• Loss history — Schrodinger reported annual net losses in four of the last five years, including $187.1 million in 2024 and $103.3 million in 2025.
• Lumpy collaboration revenue — Drug discovery revenue depends on milestone and collaboration payments such as the $10 million Ajax-related milestone, which may not recur.
• Customer concentration — In 2025 the top 20 pharma cohort accounted for 37% of software revenue and 41% of ACV.

Outlook

For fiscal 2026, management guides ACV of $218 million to $228 million, representing 10-15% growth over 2025, and drug discovery revenue of $65 million to $75 million, raised from a prior $55 million to $65 million after the Ajax milestone. Operating expenses are expected to be less than 2025. For Q3 2026, ACV is guided to $41 million to $45 million excluding contribution ACV, against $38.3 million a year earlier.