David Lebowitz's questions to Schrodinger Inc (SDGR) leadership • Q3 2024
Question
David Lebowitz of Citi, represented by John, asked about the revenue recognition and pricing dynamics for hosted versus on-premise contracts, and for single versus multi-year agreements.
Answer
CFO Geoff Porges explained that hosted contracts are recognized ratably over the contract term. In contrast, on-premise contracts have a significant portion of revenue (e.g., up to 80% for a 1-year deal) recognized upfront in the period the contract is signed. He cautioned these are generalizations, as all contracts have maintenance components that are also recognized ratably, affecting the final split.