Schrödinger Reports Strong Second Quarter 2024 Financial Results
Second Quarter Total Revenue of
Launches Major
Initial Clinical Data Expected for SGR-1505 in 1H25, SGR-2921 and SGR-3515 Data in 2H25
“We are very pleased with our results for the second quarter. We delivered 21% software revenue growth, and we see many opportunities for customers to increase their scale of adoption of our technology. Our recently announced predictive toxicology initiative reflects our commitment to investing in the science underlying our platform to drive future growth,” said
Second Quarter 2024 Financial Results
-
Total revenue for the second quarter was
$47.3 million , compared to$35.2 million in the second quarter of 2023. -
Software revenue for the second quarter increased 21% to
$35.4 million , compared to$29.4 million in the second quarter of 2023. The increase reflects increased contribution from new and existing customers purchasing hosted licenses as well as the renewal of several multi-year deals. -
Drug discovery revenue was
$11.9 million for the second quarter, compared to$5.8 million in the second quarter of 2023. The increase was primarily due to the recognition of milestone revenue associated with the progression of ongoing collaboration programs. - Software gross margin increased to 80% for the second quarter, compared to 77% in the second quarter of 2023, primarily due to increased revenue in the period.
-
Operating expenses were
$84.1 million for the second quarter, compared to$74.9 million for the second quarter of 2023. The increase was primarily due to higher R&D expenses. -
Other expense, which includes changes in fair value of equity investments and interest income, was
$1.2 million for the second quarter, compared to other income of$45.0 million for the second quarter of 2023, reflecting the difference in mark to market value of the company’s equity investments. -
Net loss for the second quarter was
$54.0 million , compared to net income of$4.3 million in the second quarter of 2023. -
At
June 30, 2024 , Schrödinger had cash, cash equivalents, restricted cash and marketable securities of approximately$381.5 million , compared to approximately$468.8 million atDecember 31, 2023 .
|
Three Months Ended |
|||||||||
|
||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
(in millions) |
|
|
|||||||
Total revenue |
$ |
47.3 |
|
|
$ |
35.2 |
|
|
35 |
% |
Software revenue |
|
35.4 |
|
|
|
29.4 |
|
|
21 |
% |
Drug discovery revenue |
|
11.9 |
|
|
|
5.8 |
|
|
104 |
% |
Software gross margin |
|
80 |
% |
|
|
77 |
% |
|
|
|
Operating expenses |
$ |
84.1 |
|
|
$ |
74.9 |
|
|
12 |
% |
Other (expense) income |
$ |
(1.2 |
) |
|
$ |
45.0 |
|
|
— |
|
Net (loss) income |
$ |
(54.0 |
) |
|
$ |
4.3 |
|
|
— |
|
For the three and six months ended
2024 Financial Outlook
Today Schrödinger updated its 2024 full-year guidance for software gross margin and operating expense growth and maintained its other financial guidance. The company’s financial expectations for the fiscal year ending
- Software revenue growth is expected to range from 6% to 13%.
-
Drug discovery revenue is expected to range from
$30 million to$35 million . -
Software gross margin is now expected to be slightly lower than 2023 and in the range of 2022 based on the effect of the research grant from the
Bill & Melinda Gates Foundation . - Operating expense growth in 2024 is now expected to range from 8% to 10%.
- Cash used for operating activities in 2024 is expected to be above cash used for operating activities in 2023.
For the third quarter of 2024, software revenue is expected to range from
Recent Highlights
Platform
-
In July, Schrödinger launched an initiative to expand its computational platform to predict toxicity associated with binding to off-targets. The goal of this initiative is to develop a computational solution to improve the properties of drug development candidates and reduce the risk of development failure. The project will be funded initially by a
$10 million grant from theBill & Melinda Gates Foundation and will leverage NVIDIA’s AI technology.
- In June, Schrödinger and AstraZeneca scientists published a method yielding more accurate predictions of experimental free energies for optimizing protein-protein interactions, which is central to biologics design. The case studies demonstrate how FEP+ calculations can be applied to real-world protein therapeutic design projects, potentially increasing throughput and lowering discovery costs.
Proprietary Pipeline
-
The company is advancing the Phase 1 dose-escalation study of SGR-1505, its MALT1 inhibitor, in patients with relapsed/refractory B-cell malignancies, and enrollment is ongoing in the
U.S. andEurope . The company expects to report initial clinical data from this study in the first half of 2025.
-
Schrödinger announced today that the FDA has granted SGR-2921, the company’s investigational CDC7 inhibitor, FDA Fast Track Designation for the treatment of relapsed/refractory acute myeloid leukemia. The Phase 1 study of SGR-2921 in patients with acute myeloid leukemia or myelodysplastic syndrome continues to enroll patients in the
U.S. and EU. The company expects to report initial clinical data from this study in the second half of 2025.
- Today, Schrödinger announced the initiation of dosing in a Phase 1 clinical study of SGR-3515, an investigational Wee1/Myt1 inhibitor in patients with advanced solid tumors. The dose-escalation study is designed to evaluate the safety, pharmacokinetics, pharmacodynamics, preliminary anti-tumor activity, and a recommended Phase 2 dose of SGR-3515. The company expects to report initial clinical data from this study in the second half of 2025.
Collaborators, Partners, and Co-Founded Companies
-
In July, Morphic Holding, Inc., a company that Schrödinger co-founded, announced its planned acquisition by Lilly for
$57 per share, or approximately$3.2 billion . Schrödinger currently owns 834,968 shares of Morphic and is entitled to low single-digit royalties on its clinical development programs, including MORF-057.
-
Development programs at other companies co-founded by Schrödinger continued to progress. In May,
Ajax Therapeutics, Inc. completed a Series C financing and received Investigational New Drug clearance for AJ1-11095, a type II JAK2 inhibitor. In June, Structure Therapeutics presented obesity and diabetes data from its Phase 1b/2a study of GSBR-1290, a GLP-1 receptor agonist, at the Annual Meeting of theAmerican Diabetes Association .
Webcast and Conference Call Information
Schrödinger will host a conference call to discuss its second quarter 2024 financial results on
Non-GAAP Information
Included in this press release is certain financial information that has not been prepared in accordance with generally accepted accounting principles in
Other companies in Schrödinger’s industry may calculate non-GAAP net income (loss) and non-GAAP net income (loss) per share differently than we do, limiting their usefulness as comparative measures. For a reconciliation of non-GAAP net income (loss) and non-GAAP net income (loss) per share to GAAP net income (loss) and GAAP net income (loss) per share, respectively, please refer to the tables at the end of this press release.
About Schrödinger
Schrödinger is transforming the way therapeutics and materials are discovered. Schrödinger has pioneered a physics-based computational platform that enables discovery of high-quality, novel molecules for drug development and materials applications more rapidly and at lower cost compared to traditional methods. The software platform is licensed by biopharmaceutical and industrial companies, academic institutions, and government laboratories around the world. Schrödinger’s multidisciplinary drug discovery team also leverages the software platform to advance a portfolio of collaborative and proprietary programs to address unmet medical needs.
Founded in 1990, Schrödinger has approximately 850 employees and is engaged with customers and collaborators in more than 70 countries. To learn more, visit www.schrodinger.com, follow us on LinkedIn and Instagram, or visit our blog, Extrapolations.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 including, but not limited to those statements regarding Schrödinger’s expectations about the speed and capacity of its computational platform, its financial outlook for the fiscal year ending
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||||||||||
(in thousands, except for share and per share amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
||||||||
Software products and services |
$ |
35,404 |
|
|
$ |
29,352 |
|
|
$ |
68,819 |
|
|
$ |
61,565 |
|
Drug discovery |
|
11,930 |
|
|
|
5,837 |
|
|
|
15,113 |
|
|
|
38,406 |
|
Total revenues |
|
47,334 |
|
|
|
35,189 |
|
|
|
83,932 |
|
|
|
99,971 |
|
Cost of revenues: |
|
|
|
|
|
|
|
||||||||
Software products and services |
|
7,167 |
|
|
|
6,695 |
|
|
|
15,143 |
|
|
|
13,810 |
|
Drug discovery |
|
8,832 |
|
|
|
14,684 |
|
|
|
18,564 |
|
|
|
26,658 |
|
Total cost of revenues |
|
15,999 |
|
|
|
21,379 |
|
|
|
33,707 |
|
|
|
40,468 |
|
Gross profit |
|
31,335 |
|
|
|
13,810 |
|
|
|
50,225 |
|
|
|
59,503 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
50,835 |
|
|
|
42,705 |
|
|
|
101,446 |
|
|
|
83,446 |
|
Sales and marketing |
|
9,693 |
|
|
|
9,022 |
|
|
|
19,864 |
|
|
|
18,167 |
|
General and administrative |
|
23,536 |
|
|
|
23,216 |
|
|
|
49,077 |
|
|
|
49,524 |
|
Total operating expenses |
|
84,064 |
|
|
|
74,943 |
|
|
|
170,387 |
|
|
|
151,137 |
|
Loss from operations |
|
(52,729 |
) |
|
|
(61,133 |
) |
|
|
(120,162 |
) |
|
|
(91,634 |
) |
Other (expense) income |
|
|
|
|
|
|
|
||||||||
Gain on equity investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
147,322 |
|
Change in fair value |
|
(5,833 |
) |
|
|
40,654 |
|
|
|
2,304 |
|
|
|
76,391 |
|
Other income |
|
4,598 |
|
|
|
4,326 |
|
|
|
9,626 |
|
|
|
7,263 |
|
Total other (expense) income |
|
(1,235 |
) |
|
|
44,980 |
|
|
|
11,930 |
|
|
|
230,976 |
|
(Loss) income before income taxes |
|
(53,964 |
) |
|
|
(16,153 |
) |
|
|
(108,232 |
) |
|
|
139,342 |
|
Income tax expense (benefit) |
|
83 |
|
|
|
(20,431 |
) |
|
|
539 |
|
|
|
5,928 |
|
Net (loss) income |
$ |
(54,047 |
) |
|
$ |
4,278 |
|
|
$ |
(108,771 |
) |
|
$ |
133,414 |
|
Net (loss) income per share of common and limited common stockholders, basic: |
$ |
(0.74 |
) |
|
$ |
0.06 |
|
|
$ |
(1.50 |
) |
|
$ |
1.86 |
|
Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, basic: |
|
72,711,685 |
|
|
|
71,642,722 |
|
|
|
72,501,409 |
|
|
|
71,555,395 |
|
Net (loss) income per share of common and limited common stockholders, diluted: |
$ |
(0.74 |
) |
|
$ |
0.06 |
|
|
$ |
(1.50 |
) |
|
$ |
1.79 |
|
Weighted average shares used to compute net (loss) income per share of common and limited common stockholders, diluted: |
|
72,711,685 |
|
|
|
75,064,323 |
|
|
|
72,501,409 |
|
|
|
74,499,672 |
|
Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
(in thousands, except for share and per share amounts) |
|||||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
108,109 |
|
|
$ |
155,315 |
|
Restricted cash |
|
4,227 |
|
|
|
5,751 |
|
Marketable securities |
|
269,180 |
|
|
|
307,688 |
|
Accounts receivable, net of allowance for doubtful accounts of |
|
11,849 |
|
|
|
65,992 |
|
Unbilled and other receivables, net for allowance for unbilled receivables of |
|
40,321 |
|
|
|
23,124 |
|
Prepaid expenses |
|
15,493 |
|
|
|
9,926 |
|
Total current assets |
|
449,179 |
|
|
|
567,796 |
|
Property and equipment, net |
|
25,723 |
|
|
|
23,325 |
|
Equity investments |
|
88,555 |
|
|
|
83,251 |
|
|
|
4,791 |
|
|
|
4,791 |
|
Right of use assets - operating leases |
|
116,525 |
|
|
|
117,778 |
|
Other assets |
|
3,598 |
|
|
|
6,014 |
|
Total assets |
$ |
688,371 |
|
|
$ |
802,955 |
|
Liabilities and Stockholders' Equity: |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
|
8,116 |
|
|
$ |
16,815 |
|
Accrued payroll, taxes, and benefits |
|
24,320 |
|
|
|
31,763 |
|
Deferred revenue |
|
40,799 |
|
|
|
56,231 |
|
Lease liabilities - operating leases |
|
16,801 |
|
|
|
16,868 |
|
Other accrued liabilities |
|
9,723 |
|
|
|
11,996 |
|
Total current liabilities |
|
99,759 |
|
|
|
133,673 |
|
Deferred revenue, long-term |
|
7,080 |
|
|
|
9,043 |
|
Lease liabilities - operating leases, long-term |
|
107,128 |
|
|
|
111,014 |
|
Other liabilities, long-term |
|
424 |
|
|
|
667 |
|
Total liabilities |
|
214,391 |
|
|
|
254,397 |
|
Stockholders' equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
636 |
|
|
|
630 |
|
Limited common stock, |
|
92 |
|
|
|
92 |
|
Additional paid-in capital |
|
920,621 |
|
|
|
885,973 |
|
Accumulated deficit |
|
(447,189 |
) |
|
|
(338,418 |
) |
Accumulated other comprehensive (loss) income |
|
(180 |
) |
|
|
281 |
|
Total stockholders' equity |
|
473,980 |
|
|
|
548,558 |
|
Total liabilities and stockholders' equity |
$ |
688,371 |
|
|
$ |
802,955 |
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
(in thousands) |
|||||||
|
|||||||
|
Six Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net (loss) income |
$ |
(108,771 |
) |
|
$ |
133,414 |
|
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
|
|
|
||||
Gain on equity investments |
|
— |
|
|
|
(147,322 |
) |
Fair value adjustments |
|
(2,304 |
) |
|
|
(76,391 |
) |
Depreciation and amortization |
|
2,837 |
|
|
|
2,925 |
|
Stock-based compensation |
|
25,026 |
|
|
|
22,653 |
|
Noncash investment accretion |
|
(4,706 |
) |
|
|
(2,858 |
) |
Loss on disposal of property and equipment |
|
7 |
|
|
|
63 |
|
Decrease (increase) in assets: |
|
|
|
||||
Accounts receivable, net |
|
54,143 |
|
|
|
46,301 |
|
Unbilled and other receivables |
|
(17,197 |
) |
|
|
(1,448 |
) |
Reduction in the carrying amount of right of use assets - operating leases |
|
4,205 |
|
|
|
3,720 |
|
Prepaid expenses and other assets |
|
(6,118 |
) |
|
|
(11,408 |
) |
(Decrease) increase in liabilities: |
|
|
|
||||
Accounts payable |
|
(8,941 |
) |
|
|
192 |
|
Income taxes payable |
|
— |
|
|
|
4,779 |
|
Accrued payroll, taxes, and benefits |
|
(7,443 |
) |
|
|
(3,554 |
) |
Deferred revenue |
|
(17,395 |
) |
|
|
(21,235 |
) |
Lease liabilities - operating leases |
|
(3,953 |
) |
|
|
(1,584 |
) |
Other accrued liabilities |
|
(2,389 |
) |
|
|
2,216 |
|
Net cash used in operating activities |
|
(92,999 |
) |
|
|
(49,537 |
) |
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(5,096 |
) |
|
|
(6,007 |
) |
Purchases of equity investments |
|
(3,000 |
) |
|
|
(4,125 |
) |
Distribution from equity investment |
|
— |
|
|
|
147,117 |
|
Purchases of marketable securities |
|
(153,513 |
) |
|
|
(125,714 |
) |
Proceeds from maturity of marketable securities |
|
196,266 |
|
|
|
228,174 |
|
Net cash provided by investing activities |
|
34,657 |
|
|
|
239,445 |
|
Cash flows from financing activities: |
|
|
|
||||
Issuances of common stock upon stock option exercises |
|
950 |
|
|
|
5,565 |
|
Principal payments on finance leases |
|
(29 |
) |
|
|
— |
|
Payment of offering costs |
|
— |
|
|
|
(174 |
) |
Issuance of common stock upon ATM offering, net |
|
8,691 |
|
|
|
— |
|
Net cash provided by financing activities |
|
9,612 |
|
|
|
5,391 |
|
Net (decrease) increase in cash and cash equivalents and restricted cash |
|
(48,730 |
) |
|
|
195,299 |
|
Cash and cash equivalents and restricted cash, beginning of period |
|
161,066 |
|
|
|
95,717 |
|
Cash and cash equivalents and restricted cash, end of period |
$ |
112,336 |
|
|
$ |
291,016 |
|
|
|
|
|
||||
Supplemental disclosure of cash flow and noncash information |
|
|
|
||||
Cash paid for income taxes |
$ |
439 |
|
|
$ |
918 |
|
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
||||
Accrued offering costs |
|
— |
|
|
|
199 |
|
Purchases of property and equipment in accounts payable |
|
435 |
|
|
|
2,935 |
|
Purchases of property and equipment in accrued liabilities |
|
331 |
|
|
|
30 |
|
Acquisition of right of use assets - operating leases, contingency resolution |
|
2,848 |
|
|
|
514 |
|
Acquisition of right of use assets in exchange for lease liabilities - operating leases |
|
— |
|
|
|
6,333 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in thousands, except per share data) |
||||||||||||||
Net (loss) income (GAAP) |
$ |
(54,047 |
) |
|
$ |
4,278 |
|
|
$ |
(108,771 |
) |
|
$ |
133,414 |
|
Income tax expense (benefit) |
|
83 |
|
|
|
(20,431 |
) |
|
|
539 |
|
|
|
5,928 |
|
Gain on equity investment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(147,322 |
) |
Change in fair value |
|
5,833 |
|
|
|
(40,654 |
) |
|
|
(2,304 |
) |
|
|
(76,391 |
) |
Non-GAAP net loss |
$ |
(48,131 |
) |
|
$ |
(56,807 |
) |
|
$ |
(110,536 |
) |
|
$ |
(84,371 |
) |
Non-GAAP net loss per share of common and limited common stockholders, basic and diluted: |
$ |
(0.66 |
) |
|
$ |
(0.79 |
) |
|
$ |
(1.52 |
) |
|
$ |
(1.18 |
) |
Weighted average shares used to compute net loss per share of common and limited common stockholders, basic and diluted: |
|
72,711,685 |
|
|
|
71,642,722 |
|
|
|
72,501,409 |
|
|
|
71,555,395 |
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731471319/en/
Schrödinger, Inc.
matthew.luchini@schrodinger.com
917-719-0636
Schrödinger, Inc.
allie.nicodemo@schrodinger.com
617-356-2325
Source: Schrödinger