Company Performance - Schrodinger, Inc. reported a quarterly loss of $0.52 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.40, representing an earnings surprise of -30% [1] - The company's revenues for the quarter ended September 2024 were $35.29 million, missing the Zacks Consensus Estimate by 13.85%, and down from $42.57 million a year ago [2] - Over the last four quarters, Schrodinger has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Movement and Outlook - Schrodinger shares have declined approximately 45.4% since the beginning of the year, contrasting with the S&P 500's gain of 25.8% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at -$0.26 on revenues of $88.58 million, and -$2.19 on revenues of $211.65 million for the current fiscal year [7] Industry Context - Schrodinger operates within the Zacks Medical Info Systems industry, which is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The performance of Schrodinger's stock may be influenced by the overall outlook for the industry, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - The company reported significant operating losses and expects to incur losses over the next several years[11]. - Total revenues for Q3 2024 were $35.29 million, a decrease of 17.3% compared to $42.57 million in Q3 2023[19]. - The net loss for Q3 2024 was $38.14 million, compared to a net loss of $62.02 million in Q3 2023, showing an improvement of 38.5%[22]. - Operating expenses for Q3 2024 totaled $86.15 million, up from $79.83 million in Q3 2023, reflecting a 7.9% increase[19]. - The company reported a gross profit of $17.73 million for Q3 2024, down from $23.64 million in Q3 2023, a decrease of 25.1%[19]. - Net loss for the nine months ended September 30, 2024, was $146.9 million compared to a net income of $71.4 million for the same period in 2023[26]. - Cash used in operating activities for the nine months ended September 30, 2024, was $126.3 million, an increase from $99.5 million in the same period of 2023[26]. - Total stockholders' equity as of September 30, 2024, was $449.4 million, down from $563.6 million at the end of September 2023[24]. - The company reported a fair value adjustment loss of $27.8 million for the nine months ended September 30, 2024[26]. - The company reported a consolidated net loss of $38,136 for the three months ended September 30, 2024, compared to a net loss of $62,024 in the same period of 2023[164]. Revenue Sources - A substantial portion of the company's revenue is generated from life sciences industry customers, making it vulnerable to industry-specific factors[11]. - The company’s software business derives revenue from five sources, including on-premise software license fees and hosted software subscription fees[55]. - Software products and services revenue increased to $31.88 million in Q3 2024 from $28.90 million in Q3 2023, representing an increase of 6.9%[19]. - Revenue from drug discovery services for the three months ended September 30, 2024, was $2,813, a decrease of 77.9% from $12,730 in the same period of 2023[69]. - The total software revenue for the nine months ended September 30, 2024, was $100,703, an increase of 11.5% from $90,469 in the same period of 2023[64]. - The Company recognized $1.1 million and $10.1 million in revenue associated with the collaboration agreement with Bristol-Myers Squibb for the three and nine months ended September 30, 2024, respectively, compared to $11.2 million and $40.0 million in the same periods of 2023[79]. Research and Development - The company is focused on expanding its proprietary drug discovery programs and plans to submit investigational new drug applications to the FDA[4]. - Research and development expenses increased to $50.98 million in Q3 2024, compared to $46.83 million in Q3 2023, an increase of 4.6%[19]. - Research and development expenses for the nine months ended September 30, 2024, were $12,512, up from $11,422 in 2023, indicating a year-over-year increase of 9.5%[123]. - The company has limited experience in clinical development, which may impact the success of its programs[11]. - The company relies on third parties for clinical trials, which may affect the timeline for seeking marketing approval[11]. Strategic Initiatives - The company aims to accelerate the growth of its software business and acquire new customers[4]. - The company is pursuing multiple business strategies and expects to expand its development and regulatory capabilities[13]. - The company emphasizes the importance of retaining key executives and attracting qualified personnel for future success[13]. - The company acknowledges the potential impact of geopolitical and global economic developments on its operations[5]. Cash and Assets - Cash and cash equivalents as of September 30, 2024, were $160.42 million, up from $155.32 million at the end of 2023[17]. - Total current assets decreased to $456.40 million as of September 30, 2024, down from $567.80 million at the end of 2023, a decline of 19.6%[17]. - Total liabilities decreased to $219.87 million as of September 30, 2024, down from $254.40 million at the end of 2023, a reduction of 13.5%[17]. - Cash and cash equivalents at the end of the period were $170.2 million, compared to $255.6 million at the end of September 2023[26]. - The company's total assets measured at fair value as of September 30, 2024, amounted to $457,027, with cash and cash equivalents at $170,176 and marketable securities at $228,263[95]. Stock and Compensation - The company has authorized 500,000,000 shares of common stock and 100,000,000 shares of limited common stock as of September 30, 2024[112]. - The company’s stock incentive plans include the 2010 Stock Plan, 2020 Equity Incentive Plan, 2021 Inducement Equity Incentive Plan, and 2022 Equity Incentive Plan[118]. - Total stock-based compensation for the nine months ended September 30, 2024, was $37.4 million, up from $35.3 million in the same period of 2023[26]. - Total stock-based compensation expense for the three months ended September 30, 2024, was $12,398, compared to $12,654 for the same period in 2023, reflecting a decrease of 2%[123]. - The intrinsic value of options exercised during the nine months ended September 30, 2024, was $1,534, compared to $7,099 for the same period in 2023, showing a decrease of 78%[139]. Collaborations and Agreements - The Company entered into a research collaboration and license agreement with Novartis, with an initial upfront fee of $150 million and potential total milestones of up to $2.272 billion[166]. - The collaboration with Novartis includes an initial upfront fee of $150.0 million and potential total milestones of up to $2.272 billion[185]. - The company is eligible to receive up to $482.0 million in total milestone payments from Bristol-Myers Squibb for ongoing collaborations[183]. - Contribution revenue from the Bill & Melinda Gates Foundation is recognized on a cost reimbursement basis for services in women's health[196].

Revenue Performance - Total revenue for Q3 2024 was $35.3 million, a decrease of 17% compared to $42.6 million in Q3 2023[3] - Software revenue increased by 10% to $31.9 million in Q3 2024, up from $28.9 million in Q3 2023[3] - Drug discovery revenue fell to $3.4 million in Q3 2024, down 75% from $13.7 million in Q3 2023[3] - Total revenues for the three months ended September 30, 2024, were $35,290,000, a decrease of 17.1% compared to $42,569,000 for the same period in 2023[22] - Software products and services revenue increased to $31,884,000, up 10.3% from $28,904,000 year-over-year[22] Operating Expenses and Losses - Operating expenses rose to $86.2 million in Q3 2024, an increase of 7.9% from $79.8 million in Q3 2023[3] - The net loss for Q3 2024 was $38.1 million, an improvement from a net loss of $62.0 million in Q3 2023[3] - Operating expenses increased to $86,150,000 for the three months ended September 30, 2024, compared to $79,832,000 in the prior year, reflecting a rise of 7.5%[22] - The net loss for the three months ended September 30, 2024, was $(38,136,000), compared to a net loss of $(62,024,000) for the same period in 2023, representing a 38.5% improvement[22] Cash and Assets - Cash, cash equivalents, and marketable securities totaled $398.4 million as of September 30, 2024, down from $468.8 million at the end of 2023[3] - Cash and cash equivalents as of September 30, 2024, were $160,416,000, an increase from $155,315,000 at the end of 2023[23] - Total assets decreased to $669,296,000 as of September 30, 2024, down from $802,955,000 at the end of 2023, a decline of 16.6%[23] - Total liabilities decreased to $219,871,000 as of September 30, 2024, compared to $254,397,000 at the end of 2023, a reduction of 13.5%[23] - The accumulated deficit increased to $(485,325,000) as of September 30, 2024, compared to $(338,418,000) at the end of 2023[23] Financial Guidance and Collaborations - Schrödinger updated its 2024 financial guidance, expecting software revenue growth between 8% and 13%[5] - The company announced a collaboration with Novartis, receiving $150 million upfront and potential milestone payments up to $2.3 billion[1] Non-GAAP Metrics and Adjustments - Non-GAAP net loss for the nine months ended September 30, 2024, was $174,221, compared to a non-GAAP net loss of $134,760 for the same period in 2023[25] - Non-GAAP net loss per share for the nine months ended September 30, 2024, was $2.40, compared to $1.88 for the same period in 2023[25] - The company experienced a fair value adjustment loss of $27,763 for the nine months ended September 30, 2024, compared to a loss of $61,869 in the same period last year[24] Other Financial Activities - The company reported a net cash provided by investing activities of $125,361 for the nine months ended September 30, 2024, compared to $252,648 in the prior year[24] - The company issued common stock upon ATM offering, netting $8,691 during the nine months ended September 30, 2024[24] - The company had a significant increase in accounts receivable, netting $52,711 for the nine months ended September 30, 2024, compared to $36,069 in the prior year[24]

Group 1 - Kuehn Law, PLLC is investigating potential breaches of fiduciary duties by officers and directors of Schrodinger, Inc. (NASDAQ: SDGR) related to self-dealing [1] - The investigation may lead to shareholder damages and corporate governance reforms [1] Group 2 - Long-term shareholders of SDGR are encouraged to contact Kuehn Law for a free consultation regarding their rights [2] - Kuehn Law covers all case costs and does not charge investor clients [2]

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $47.3 million, compared to $35.2 million in Q2 2023, reflecting a year-over-year increase driven by software and drug discovery revenue [15][20] - Software revenue was $35.4 million in Q2 2024, up from $29.4 million in Q2 2023, marking a 21% increase [11][12] - Drug discovery revenue increased to $11.9 million in Q2 2024 from $5.8 million in the same period last year [15] - Overall gross margin improved to 66% in Q2 2024 from 39% in Q2 2023, driven by higher revenue and lower costs [17] Business Line Data and Key Metrics Changes - On-premise software revenue grew by 11.5% to $18.8 million, while hosted software revenue surged by 82% to $8 million [12] - Maintenance revenue remained flat year-over-year at $5.8 million, and professional services revenue increased by 23% [12] - The shift in employee allocation from collaboration projects to proprietary research contributed to a significant decrease in drug discovery service costs to $8.8 million from $14.7 million [16] Market Data and Key Metrics Changes - The company noted challenges in the Chinese market due to reduced capital availability for biopharma research, while growth opportunities were observed in Europe and North America [14] - The company maintained its revenue guidance for the full year, indicating confidence in the growth potential despite market volatility [10][22] Company Strategy and Development Direction - The company is focused on scaling up its software business and advancing its drug discovery programs, with a new initiative aimed at predictive toxicology funded by a $10 million grant from the Gates Foundation [8][22] - Collaborations with partner companies are seen as crucial for validation and capital, with recent successes including Morphic Therapeutic's planned acquisition by Lilly for $3.2 billion [7][24] - The company aims to leverage advanced computational methods and machine learning to enhance drug discovery efficiency [8][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in customer retention and scaling up software usage, particularly in Q4, which is typically the largest quarter for renewals [32][34] - The company anticipates that the predictive toxicology project will contribute to software revenue growth in the coming years, despite a modest negative impact on gross margins during the grant period [22][23] - Management highlighted the importance of maintaining a strong cash position and exploring partnership opportunities to support ongoing operations [35] Other Important Information - The company reported a loss per share of $0.74 for Q2 2024, compared to net income of $4.3 million in Q2 2023 [20] - The average fully diluted share count decreased to 72.7 million from 75.1 million year-over-year [21] - The company expects to receive $48 million from the sale of its holding in Morphic, which will help offset cash used in operations [21] Q&A Session Summary Question: Outlook for the rest of the year and customer dynamics - Management noted strong engagement with customers and high retention rates, with expectations for scaling up usage primarily in Q4 [32][34] Question: Cash position and options for capital - Management highlighted the expected cash inflow from Morphic and ongoing discussions for potential partnerships as sources of capital [35] Question: Growth in software business among smaller biotech companies - Despite a turbulent environment, new biotech companies are still forming and seeking cost-effective solutions, leading to more new accounts than reductions [37] Question: Launch timeline for predictive toxicology tools - The company is excited about the project and expects to release it in the near future, contributing to software revenue growth [40][41] Question: Clinical trial enrollment and timeline changes - Enrollment is progressing well, and the timeline for data readouts has been refined to provide more specific guidance [45][46] Question: Impact of large-scale customer discussions on revenue - Management indicated that discussions with large customers could lead to both immediate and long-term revenue growth opportunities [47][48]

Schrodinger, Inc. (SDGR) reported $47.33 million in revenue for the quarter ended June 2024, representing a year-over-year increase of 34.5%. EPS of -$0.74 for the same period compares to -$0.21 a year ago. The reported revenue represents a surprise of +17.78% over the Zacks Consensus Estimate of $40.19 million. With the consensus EPS estimate being -$0.85, the EPS surprise was +12.94%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations ...

Company Performance - Schrodinger, Inc. reported a quarterly loss of $0.74 per share, which was better than the Zacks Consensus Estimate of a loss of $0.85, and compared to a loss of $0.21 per share a year ago, indicating an earnings surprise of 12.94% [1] - The company posted revenues of $47.33 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 17.78%, and this represents an increase from year-ago revenues of $35.19 million [2] - Over the last four quarters, Schrodinger has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Future Outlook - The sustainability of Schrodinger's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is -$0.87 on revenues of $42.66 million, and for the current fiscal year, it is -$2.83 on revenues of $211.58 million [7] - The estimate revisions trend for Schrodinger is mixed, resulting in a Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Medical Info Systems industry, to which Schrodinger belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ________________________________________ FORM 10-Q ________________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39206 ________________________________________ S ...

Exhibit 99.1 Schrödinger Reports Strong Second Quarter 2024 Financial Results Second Quarter Total Revenue of $47.3 Million, Software Revenue of $35.4 Million Launches Major Initiative to Expand Application of Computational Tools for Predictive Toxicology Initial Clinical Data Expected for SGR-1505 in 1H25, SGR-2921 and SGR-3515 Data in 2H25 New York, July 31, 2024 – Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based computational platform is transforming the way therapeutics and materials are discovered ...

Earnings Expectations - The company is expected to report a quarterly loss of $0 85 per share, representing a year-over-year decline of 304 8% [3] - Revenues are projected to be $40 19 million, up 14 2% from the same quarter last year [4] - The consensus EPS estimate has been revised 5 36% lower over the last 30 days, reflecting analysts' reassessment of initial estimates [5] Earnings Surprise Potential - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -13 58%, indicating analysts have become bearish on the company's earnings prospects [11] - The stock currently carries a Zacks Rank of 3, making it difficult to predict an earnings beat [12][13] - Historically, the company has beaten consensus EPS estimates two times over the last four quarters [15] Market Impact - The earnings report, expected on July 31, 2024, could influence the stock price depending on whether the results exceed or fall short of expectations [2] - A positive Earnings ESP combined with a strong Zacks Rank increases the likelihood of an earnings beat, with stocks in this category producing a positive surprise nearly 70% of the time [9] - However, the company does not appear to be a compelling earnings-beat candidate, and investors should consider other factors before making decisions [18]