4Q/Full-Year 2025 Financial Results February 2026 Cautionary Note and Disclaimer This presentation contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical fact, made by Schrödinger, Inc. ("we," "us," "our," "Schrödinger," or the "Company") contained in this presentation, including, without limitation, statements regarding the potential ad ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $54.8 million, a 16% increase from Q2 2024 [6][10] - Software revenue reached $40.5 million, reflecting a 15% year-over-year growth [6][11] - Drug Discovery revenue was $14.2 million, marking a 19% increase compared to Q2 2024 [12] - Software gross margin decreased to 68% from 80% in 2024 due to changes in revenue mix and investments in predictive toxicology [12] - Net loss for the quarter was $43 million, or $0.59 per share, compared to a net loss of $54 million, or $0.74 per share in Q2 2024 [14] Business Line Data and Key Metrics Changes - Software revenue growth was primarily driven by higher revenue from hosted contracts and contributions from the Gates Foundation grant [11] - Drug Discovery revenue growth was attributed to the recognition of a $150 million upfront payment from the Novartis collaboration [12] Market Data and Key Metrics Changes - The macroeconomic environment remains uncertain, but demand for the software platform is strong due to the industry's need for validated computational approaches [7] - The biotech segment has faced challenges, while discussions with pharmaceutical customers remain constructive [38] Company Strategy and Development Direction - The company aims to accelerate the growth of its software business and advance its drug discovery programs [4] - There is a focus on integrating predictive methods into all stages of molecular discovery [7] - The company is exploring strategic opportunities for its proprietary drug SGR1505 to maximize its potential [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining full-year software revenue growth guidance despite macroeconomic challenges [7] - The company expects to report initial Phase I data from two clinical programs in Q4 2025 [23] - Discussions with customers about renewals and scale-ups are encouraging, particularly for the fourth quarter [14] Other Important Information - The company has a strong cash position with $462 million in cash and equivalents as of June 30 [14] - Operating expenses are expected to be lower in 2025 compared to 2024 due to a $30 million expense reduction initiative [15] Q&A Session Summary Question: How has the tone of customer conversations changed regarding investments in the platform? - Management noted that discussions are positive, with clear demand for advanced predictive technologies despite macroeconomic concerns [27] Question: Why decide to out-license the product at this stage of development? - The company believes that SGR1505 is best developed in partnership with a company that has expertise in hematology, which can accelerate the program [32] Question: What is the demand setup for the back half of the year? - Demand remains strong, with good conversations about renewals and potential scale-ups, particularly in the pharmaceutical sector [38] Question: Can you provide details on the adoption of the predictive toxicology feature? - There is significant excitement and demand for the predictive toxicology technology, with ongoing beta testing [44] Question: What is the timeline for feedback on the beta version of the predictive toxicology solution? - Feedback will be collected as beta testing progresses, but a specific timeline for rollout is not yet established [51] Question: What is the rationale behind the recent headcount reductions? - The reductions were part of a broader cost management strategy and did not impact strategic initiatives [61] Question: What data can be expected in Q4 for SGR2921 and SGR3515? - Initial data will include safety, PKPD, and preliminary clinical activity, with updates planned for the end of the year [71] Question: How might the expanded collaboration with Ajax impact future milestones? - The collaboration will contribute to discovery revenue, with potential for future milestones and royalties [74]

Core Insights - Simulations Plus, Inc. has launched DILIsym 11, enhancing its quantitative systems toxicology platform for improved drug-induced liver injury prediction, particularly with pediatric representation and an advanced T-cell model [1][2][3] Group 1: Product Enhancements - DILIsym 11 introduces significant enhancements, including pediatric modeling to assess liver toxicity risk in children, which is a notable advancement in predictive toxicology [3][5] - The new T-cell module offers deeper insights into CD8+ T-cell-mediated liver damage, alongside improved simulations for bile acid-related and cholestatic liver injuries [5][6] - The platform is recognized as a regulatory-grade simulation tool, having been reviewed by the FDA's DILI team, which underscores its clinical relevance [4][6] Group 2: Financial Performance - Simulations Plus reported a 23% year-over-year revenue increase to $22.4 million, driven by demand for its software and services, with contributions from the recently acquired Pro-ficiency business units [7][9] - The company anticipates revenues between $90 million and $93 million for fiscal 2025, reflecting a 28-33% increase from fiscal 2024, with Pro-ficiency expected to add $15-$18 million [9] Group 3: Market Context - Despite the positive performance of Simulations Plus, the broader biopharmaceutical sector faces financial challenges, impacting research and development investments [8] - The company is positioned to gain traction in the market as it continues to innovate in biosimulation and predictive modeling, which is critical for improving drug safety [6][8]

Summary of Schrödinger (SDGR) 2025 Conference Call Company Overview - Schrödinger combines physics-based methods with artificial intelligence (AI) and machine learning to accelerate the discovery of novel chemical materials for life sciences and material sciences applications [2][5] - The company has approximately 1,800 global customers, primarily in the life sciences sector, including nearly every academic institution studying chemistry [3][4] Financial Performance - In the previous year, Schrödinger reported $180 million in software revenue, growing at 13% [6] - Drug discovery revenue was $27 million, down from $57 million due to a large milestone payment in 2023 [7] - Q1 revenue reached nearly $60 million, a 63% year-over-year increase, with software revenue at $48.8 million (46% growth) and drug discovery revenue at $10.7 million [8][9] - The company forecasts total software revenue growth of 10% to 15% for the year, with drug discovery revenue expected to recover to $45 million to $50 million [9] Business Model and Revenue Streams - Schrödinger's business model includes software licensing, drug discovery collaborations, and a proprietary pipeline with over eight active programs, three of which are in clinical stages [5][6] - The company benefits from cash inflows from collaborations and equity investments in co-founded companies that have gone public or been acquired [8] Strategic Priorities - The focus is on increasing adoption of computational technology among existing customers rather than acquiring new customers [12] - Enhancements to the platform will enable its use for biologics and predicting toxicology risks, aligning with FDA initiatives to phase out animal testing [12][51] Clinical Programs and Pipeline - The company is advancing three proprietary clinical programs, with data readouts expected in the second half of the year [10][20] - Preliminary efficacy data for SGR1505, a MALT1 inhibitor, shows promising results in heavily pretreated patients [14][15] Collaborations and Partnerships - Recent collaborations include a significant deal with Novartis, which involved a $150 million upfront milestone payment for drug discovery collaboration [33] - The partnership with Novartis has led to a substantial increase in software revenue, with Novartis now among the top tier of customers [36][62] Market Dynamics and Customer Insights - The company has observed no significant cutbacks in R&D spending among large pharmaceutical companies despite macroeconomic challenges [60] - Retention rates among large customers are exceptionally high at 99.9% [61] Competitive Landscape - Schrödinger differentiates itself through its unique combination of physics-based methods and machine learning, with limited direct competition in this niche [72][74] - The company views the current AI boom in drug discovery as beneficial, as it may lead to increased use of structure-based drug design, which aligns with Schrödinger's platform [73][74] Conclusion - Schrödinger is well-positioned for growth with a robust business model, strong financial performance, and strategic collaborations, while also adapting to industry trends and regulatory changes in drug discovery and development.