Schrodinger(US:SDGR)2020-11-12 16:33Financial Data and Key Metrics Changes - Total revenue for Q3 2020 was $25.8 million, representing a 29% increase compared to Q3 2019 [11][34] - Software revenue reached $22.9 million, an increase of 42% year-over-year [11][35] - Gross profit was $15.3 million, up 43% from the same quarter last year [39] - Operating expenses were $30.7 million, a 40% increase compared to Q3 2019 [40] - Net income adjusted for non-controlling interests was $3.9 million, compared to a net loss of $11.5 million in Q3 2019 [42] Business Line Data and Key Metrics Changes - Drug discovery segment revenue was $2.9 million, down 24% compared to Q3 2019, primarily due to the timing of program milestones [37] - Deferred revenue balance at the end of the quarter was $21.7 million, a 13% increase from Q3 2019 [39] Market Data and Key Metrics Changes - The company experienced growth in both life sciences and material science sectors, with material science growing at a higher percentage than life sciences [36][62] - The company is expanding into new verticals, including polymers and energy storage, indicating a growing market presence [62] Company Strategy and Development Direction - The company aims to accelerate the growth of its software business and advance its drug discovery programs [4][10] - Plans to initiate IND-enabling studies for at least one program in the first half of 2021 [40][30] - The company is focused on maintaining its lead in drug discovery technology and is open to exploring M&A opportunities [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy despite potential temporary delays in drug discovery programs due to COVID-19 [44][45] - The company is well-positioned to deliver on its mission to transform drug discovery and materials design [46] Other Important Information - The company raised $347 million in gross proceeds from a follow-on public offering, increasing cash and equivalents to $599 million [10][43] - The company continues to hire talented scientists and software developers to support its growth [14] Q&A Session Summary Question: How has the company capitalized on deeper engagement with the platform? - Management noted that the technology has significantly improved, leading to increased validation and scaling up of software use by larger companies [49] Question: When will the company decide to move internal drugs into clinical studies? - Management indicated that they are building the necessary infrastructure and hiring to support clinical studies, with plans to initiate GLP-tox studies [50] Question: Are there metrics to support customer acceleration in usage? - Management confirmed that they are seeing significant contributions from increased adoption by large customers, leading to larger contract sizes and additional licenses [56] Question: What are the investment priorities going forward? - Management emphasized the importance of ramping up capabilities for IND-enabling studies and maintaining investment in both drug discovery and material science [64]