Financial Performance (Q1 2025) - Total revenue reached $59.6 million, a 63% increase compared to $36.6 million in Q1 2024 [13, 28] - Software revenue grew to $48.8 million, a 46% increase from $33.4 million in Q1 2024 [13, 28] - Drug discovery revenue significantly increased to $10.7 million, a 237% increase compared to $3.2 million in Q1 2024 [13, 28] - Cash and marketable securities increased by 18% to $512.1 million as of March 31, 2025, compared to $435.7 million as of March 31, 2024 [28] - Deferred revenue, current and long term, increased by 265% to $210.0 million as of March 31, 2025, compared to $57.5 million as of March 31, 2024 [28] Financial Guidance (2025) - The company projects software revenue growth of 10% - 15% for the full year 2025 [13, 37] - Drug discovery revenue is expected to be between $45 million and $50 million for 2025 [13, 37] - Operating expense growth is anticipated to be less than 5% for 2025 [13, 37] - Software revenue for the second quarter of 2025 is projected to be in the range of $38 million to $42 million [13, 37] Proprietary Pipeline Milestones - Initial Phase 1 clinical data for SGR-1505 (MALT1) in R/R B-cell malignancies is expected in June 2025 [13, 40] - Initial Phase 1 clinical data for SGR-2921 (CDC7) in R/R AML/MDS is expected in the second half of 2025 [13, 40] - Initial Phase 1 clinical data for SGR-3515 (Wee1/Myt1) in solid tumors is expected in the second half of 2025 [13, 40]

Financial Performance - Revenue for the three months ended March 31, 2025, was $59.6 million, representing a year-over-year increase of 63% from $36.6 million in the same period of 2024[185]. - The company reported a net loss of $59.8 million for the three months ended March 31, 2025, compared to a net loss of $54.7 million for the same period in 2024[185]. - Total revenues for the three months ended March 31, 2025, increased by 63% to $59,551,000 compared to $36,598,000 in the same period of 2024[211]. - The net loss for the three months ended March 31, 2025, was $59,808,000, compared to a net loss of $54,724,000 in the same period of 2024[211]. - Gross profit rose by 65% to $31,124,000, with total cost of revenues increasing by 61% to $28,427,000[211]. Drug Discovery and Development - The FDA cleared the IND for the MALT1 inhibitor SGR-1505 in June 2022, with initial data from the ongoing Phase 1 clinical trial expected in Q2 2025[170]. - The FDA granted orphan drug designation to SGR-1505 for the potential treatment of mantle cell lymphoma in August 2023[171]. - The company has initiated dosing in a Phase 1 clinical trial for the CDC7 inhibitor SGR-2921, with initial data expected in the second half of 2025[172][173]. - Drug discovery revenue surged by 237% to $10,735,000, driven by collaborations and milestone achievements[211]. - The company expects fluctuations in drug discovery revenue due to the uncertain nature of milestone achievements[194]. Collaborations and Partnerships - The company has entered into a collaboration with Novartis, receiving an upfront fee of $150 million and is eligible for up to $2.272 billion in total milestone payments[184]. - The collaboration with Bristol-Myers Squibb includes potential milestone payments of up to $482 million and tiered royalties on net sales ranging from mid-single digits to low double digits[182]. Research and Development Expenses - Research and development expenses decreased by 9% to $45,844,000, reflecting a strategic focus on proprietary drug discovery programs[211]. - Total research and development expense decreased by 9% to $45.8 million for the three months ended March 31, 2025, compared to $50.6 million in the same period of 2024[224]. - External costs for programs in preclinical and clinical development decreased by 15% to $12.7 million, primarily due to a reduction in costs for early-stage product candidates[224]. - Internal costs for discovery, preclinical, and clinical development decreased by 13% to $9.3 million, mainly due to a reduction in personnel-related expenses[225]. Cash Flow and Financial Position - Net cash provided by operating activities was $144.1 million for the three months ended March 31, 2025, compared to a cash outflow of $39.3 million in the same period of 2024[247]. - As of March 31, 2025, the company had cash, cash equivalents, restricted cash, and marketable securities totaling $512.1 million[239]. - The company plans to utilize existing cash and marketable securities primarily to fund software and drug discovery activities[241]. - The accumulated deficit as of March 31, 2025, was $585.3 million, reflecting a history of significant operating losses[235]. - Financing activities for Q1 2025 generated approximately $0.4 million in cash, primarily from stock option exercises[253]. Operating Expenses - Sales and marketing expenses increased by 2% to $10.2 million, primarily driven by a $0.2 million increase in personnel-related expenses[227]. - General and administrative expenses increased by 1% to $25.5 million, with increases in professional services and cloud computing expenses[229]. - The change in fair value of equity investments resulted in an unrealized loss of $13.1 million for the three months ended March 31, 2025[231]. Software Segment - The company operates through two reportable segments: software and drug discovery, with the software segment generating revenue from various sources including software licenses and subscriptions[178]. - The increase in software contribution revenue was due to agreements with the Bill & Melinda Gates Foundation aimed at accelerating the computational software platform[217]. - The gross margin for software products and services was 72%, down from 76% in the previous year, attributed to increased expenses related to collaborations[220][221]. Market Risks - There have been no material changes in reported market risks or risk management policies since the last Annual Report filed on February 26, 2025[254].

Exhibit 99.1 Schrödinger Reports Strong First Quarter 2025 Financial Results First Quarter Total Revenue of $59.6 Million, Software Revenue of $48.8 Million Initial SGR-1505 Phase 1 Clinical Data to be Presented in June Maintains 2025 Financial Guidance New York, May 7, 2025 – Schrödinger, Inc. (Nasdaq: SDGR) today announced financial results for the quarter ended March 31, 2025. "We are very pleased with Schrödinger's performance in the first quarter of 2025, with strong software and drug discovery revenue ...

Core Insights - The market has experienced volatility due to unexpected tariff policy changes, leading to uneven recovery among firms, with some stocks emerging as high-momentum plays [1][2] Group 1: Software-Based Drug Development - Certara Inc. has seen a 30% year-to-date increase in stock price, driven by strong outlook and a $100 million share buyback program [3][6] - Certara's revenue guidance for 2025 is projected between $415 million and $425 million, with adjusted earnings per share expected to be between 42 cents and 46 cents [4] - Schrödinger Inc. has also experienced a 25% year-to-date increase, attributed to FDA policy shifts favoring human-relevant testing and a legal settlement [9][10] Group 2: Modular Furniture Industry - The Lovesac Co. reported a 23% increase in stock price following an earnings beat and the launch of new product platforms, with EPS exceeding expectations by 33 cents [12][14] - Lovesac's modular design allows for increased supply chain flexibility, enabling the company to adapt to geopolitical changes [14] - Analysts project a 57.86% upside for Lovesac's stock, with a current price of $20.06 and a 12-month forecast of $31.67 [13][14]

Company Overview - Schrodinger, Inc. (SDGR) shares increased by 27.4% to close at $24.49, following a period of 12.4% loss over the past four weeks, indicating a significant turnaround in investor sentiment [1][2]. Legal Settlement and Upcoming Data Presentation - The price surge was driven by investor optimism after Schrodinger announced a settlement in a legal dispute regarding compensation practices for non-employee directors [2]. - The company is scheduled to present new preclinical data on SGR-3515 and SGR-4174 at the American Association for Cancer Research (AACR) Annual Meeting 2025, which will take place from April 25 to 30, 2025, in Chicago, IL [2]. Financial Expectations - Schrodinger is expected to report a quarterly loss of $0.71 per share, reflecting a year-over-year change of +6.6%, while revenues are anticipated to reach $55.76 million, marking a 52.3% increase from the previous year [3]. - The consensus EPS estimate for the upcoming quarter has been revised 2.8% higher over the last 30 days, suggesting a positive trend that could lead to price appreciation [4]. Industry Context - Schrodinger operates within the Zacks Medical Info Systems industry, where another company, TruBridge (TBRG), has seen a 0.7% decline in its stock price, with a -10.5% return over the past month [4]. - TruBridge's consensus EPS estimate remains unchanged at $0.37, representing a +94.7% change from the previous year [5].

Core Insights - The article provides an overview of the investment landscape, emphasizing the importance of independent research and verification of information before making investment decisions [2][3]. Group 1 - The content is not intended as exhaustive analysis of any featured company, highlighting the need for readers to conduct their own research [2]. - The predictions and opinions presented are based on a probabilistic approach, indicating that they do not guarantee absolute certainty [2]. - The article stresses that past performance is not indicative of future results, underscoring the inherent volatility and risks associated with stock investments [3].

Core Insights - Schrödinger's Q4 2024 results and 2025 guidance are solid, supported by a recent collaboration with Novartis that will help minimize cash burn in the coming years [1] Group 1: Company Overview - Schrödinger is focused on drug discovery and has established a collaboration with Novartis, which is expected to enhance its operational efficiency [1] - The company is positioned to benefit from a changing investment landscape characterized by an aging population and low population growth, which may create unique investment opportunities [1] Group 2: Investment Strategy - Narweena, an asset manager led by Richard Durant, seeks to identify market dislocations due to misunderstandings of long-term business prospects, focusing on companies with secular growth opportunities [1] - The investment approach emphasizes company and industry fundamentals, aiming to uncover unique insights and targeting smaller cap stocks in markets with less obvious competitive advantages [1] - The current economic environment is marked by a decline in infrastructure investment needs and a shift towards asset-light businesses, leading to increased competition for limited investment opportunities [1]

Financial Data and Key Metrics Changes - Total revenue for 2024 was $208 million, a decrease from $217 million in 2023 [30] - Software revenue grew by 13.3% from $159 million to $180 million, with hosted revenue increasing from $20 million to $35 million [30][34] - Q4 total revenue was $88.3 million, an increase of 19% compared to Q4 2023 [18] - Q4 software revenue was $79.7 million, up 16% from Q4 2023 [19] - The net loss for 2024 was $187 million or $2.57 per diluted share, compared to a net income of $41 million or $0.54 per diluted share in 2023 [34] Business Line Data and Key Metrics Changes - The number of software customers with an annual contract value (ACV) greater than $5 million increased from 4 to 8, while those with ACV greater than $1 million rose from 27% to 31% [12] - Total ACV increased by 24% to $191 million [12] - Drug discovery revenue for 2024 was $27 million, down from $58 million in 2023 [32] Market Data and Key Metrics Changes - Hosted revenue contributed 20% of software revenue for 2024, compared to 13% in 2023 [30] - The software gross margin for the year was 79.5%, down from 81.5% in 2023 [32] Company Strategy and Development Direction - The company aims to drive continued increases in the adoption of its computational technology and enterprise informatics platform in 2025 [13] - Plans to release several new products and solutions, including predictive toxicology technology and enhancements to biologics discovery technologies [14] - The company is optimistic about the broad momentum continuing into 2025, with expectations for software revenue growth in the range of 10% to 15% [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for a transformational 2025, with strong operational, financial, and strategic foundations [40] - The company does not expect significant growth from the Chinese market, which represents less than 5% of revenue [39] Other Important Information - The company reported a cash and marketable securities balance of $367 million at the end of Q4 2024, down from $469 million at the end of Q4 2023 [35] - The predictive toxicology project is expected to contribute significantly to revenue in 2025 [41] Q&A Session Summary Question: What is your assumption behind your 2025 drug discovery revenue guidance? - The increase in drug discovery revenue is broad-based, with contributions from various collaborations, including the Novartis partnership [57] Question: How should we think about the cadence for drug discovery revenues? - Drug discovery revenues are likely to be somewhat back-end weighted, with contributions scaling up throughout the year [125] Question: What do customers consider when moving from on-prem to hosted? - The transition to hosted contracts is seen as more seamless for delivering licenses, and the company expects a gradual increase in hosted revenue [76][78] Question: What are the stickiest aspects driving customer retention? - Customer retention is driven by the technology's impact on projects, leading to improved quality and faster development of candidates [90] Question: What is the gating factor for advancing new clinical candidates? - The company is currently evaluating potential partnerships for its clinical assets, with ongoing discussions as data becomes available [114]

Group 1: Earnings Performance - Schrodinger, Inc. reported a quarterly loss of $0.55 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.35, and compared to a loss of $0.32 per share a year ago, indicating a significant earnings surprise of -57.14% [1] - Over the last four quarters, the company has only surpassed consensus EPS estimates once, while it posted revenues of $88.32 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 5.79% and up from $74.13 million a year ago [2] Group 2: Stock Performance and Outlook - Schrodinger shares have increased by approximately 9.1% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Group 3: Estimate Revisions and Industry Context - The trend for estimate revisions for Schrodinger is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.78 on revenues of $47.5 million, and for the current fiscal year, it is -$2.08 on revenues of $272.34 million [7] - The Medical Info Systems industry, to which Schrodinger belongs, is currently ranked in the bottom 49% of over 250 Zacks industries, suggesting that the industry outlook could materially impact the stock's performance [8]

Financial Performance - Total revenue for 4Q24 was $88.3 million, a 19% increase compared to $74.1 million in 4Q23[13, 23] - Software revenue for 4Q24 was $79.7 million, a 16% increase compared to $68.7 million in 4Q23[13, 23] - Drug discovery revenue for 4Q24 was $8.7 million, a 58% increase compared to $5.5 million in 4Q23[13, 23] - Total revenue for FY24 was $207.5 million, a 4.2% decrease compared to $216.7 million in FY23[13, 25] - Software revenue for FY24 was $180.4 million, a 13% increase compared to $159.1 million in FY23[13, 25] - Drug discovery revenue for FY24 was $27.1 million, a 53% decrease compared to $57.5 million in FY23[13, 25] 2025 Financial Guidance - The company expects software revenue growth of 10% - 15% in 2025[13, 43] - The company expects drug discovery revenue between $45 million and $50 million in 2025[13, 43] - The company expects operating expense growth to be less than 5% in 2025[13, 43] Key Performance Indicators - Total annual contract value (ACV) increased from $154.2 million in 2023 to $190.8 million in 2024[39] - The number of customers with ACV ≥$5M doubled from 4 in 2023 to 8 in 2024[39]